Luxshare Precision Industry (002475.SZ) plans to acquire the equity of Leoni AG and its wholly-owned subsidiaries to advance the globalization process of the company's automotive business.

Luxshare Precision Industry (002475.SZ) announced that in order to accelerate the globalization of the company's automotive business and enhance the comprehensive competitiveness of the company's automotive wiring harness products in the global market, the company held its sixth board meeting and third supervisory board meeting on September 13, 2024, and approved the proposal on acquiring the equity of Leoni AG and its wholly-owned subsidiary. Through this equity transaction, the company plans to acquire a 50.1% stake in Leoni AG ("Leoni") and 100% stake in Leoni Kabel GmbH ("Leoni K"). Leoni AG includes two core businesses, the Automotive Cable Solutions Division (ACS business) and the Wiring System Division (WSD business). Prior to this transaction, Leoni B conducted business under WSD. To facilitate the smooth progress of this transaction, the sole shareholder of Leoni AG, L2-Beteiligungs GmbH ("L2-Beteiligungs" or "seller"), will ensure that the four subsidiaries under Leoni B, including Leonische Holding, Inc., Leoni Cable, Inc., Leoni Cable S.A. de C.V. and Leoni Cable de Chihuahua S.A., complete asset restructuring of their subsidiaries by the closing date. After the board approval, the company will enter into SHARE PURCHASE AGREEMENTs with L2-Beteiligungs, Leoni AG, and other related parties for transaction matters related to ACS and WSD, respectively. ACS transaction: The company's wholly-owned subsidiary Luxshare Precision Limited ("Luxshare Hong Kong") and Luxshare's subsidiary Time Interconnect Technology Limited ("TIME INTERCON") will jointly establish Time Interconnect Singapore Pte. Ltd. ("Singapore Convergence"), with registered capital of USD 400,000. Luxshare Hong Kong will hold a 51% stake in Singapore Convergence, and TIME INTERCON will hold a 49% stake. Subsequently, Singapore Convergence will acquire 100% equity of Leoni K held by Leoni AG for EUR 320 million. If the net asset value of Leoni K on the delivery date or within 60 days after the delivery date is lower than the transaction price, the purchase price will be adjusted downward, and the difference will be returned to Singapore Convergence's bank account. WSD transaction: The company's wholly-owned subsidiary Luxshare Precision Singapore Pte. Ltd. ("Luxshare Singapore") will acquire a 50.1% stake in Leoni AG held by L2-Beteiligungs for EUR 205.41 million, corresponding to 25.05 million shares. L2-Beteiligungs will continue to hold the remaining 49.9% stake in Leoni AG. As a leading global supplier of cable, wire, and wiring system solutions with over a century of development history, Leoni offers a wide range of products including standardized cables, specialty cables, and custom-developed wiring systems and components that are widely used in automotive manufacturing, communications, and medical device industries. With this acquisition, the company aims to achieve resource sharing, complementary advantages, and strategic synergy with Leoni in product development, market expansion, customer access, production capacity layout, and material procurement, enhancing its operational efficiency and research and development capabilities, and quickly establishing a differentiated competitive advantage in the global automotive wiring harness field, providing more convenient and efficient vertical integration services for Chinese car companies going global and overseas traditional car manufacturers. Furthermore, based on valuable experience gained from previous internal and external mergers and acquisitions, combined with capabilities in process optimization, vertical integration, and factory operations accumulated over the years, the company will provide optimization and empowerment in financial, business, procurement, production, personnel structure, internal control, and business expansion for Leoni and Leoni K after completing the equity delivery, to help them achieve better operational performance in the future.