China CSSC (600150.SH) disclosed the plan to absorb and merge China Shipbuilding Industry (601989.SH) through share conversion, which will significantly reduce industry competition. Trading will resume on September 19th.

China CSSC (600150.SH) announced the plan for the share exchange absorption merger with China CSSC Heavy Industry Co., Ltd. and related transactions. The specific method of this transaction is that China CSSC will issue A-shares to exchange and merge with China Shipbuilding Industry. China CSSC is the absorbing and merging party while China Shipbuilding Industry is the target company to be absorbed and merged. China CSSC will issue A-shares to all shareholders of China Shipbuilding Industry in exchange for their shares. After the completion of this share exchange absorption merger, China Shipbuilding Industry will delist and liquidate, while China CSSC will inherit all assets, liabilities, businesses, personnel, contracts, and all other rights and obligations of China Shipbuilding Industry. China CSSC will apply for the listing of the A-shares issued in this transaction on the Shanghai Stock Exchange main board. The pricing reference date for this share exchange absorption merger is the date when the first board resolution announcements of both parties are made. According to the relevant regulations of the "Reorganization Management Measures," the exchange price for China CSSC is determined to be 37.84 yuan per share based on the average stock trading prices of the previous 120 trading days before the pricing reference date. The exchange price for China Shipbuilding Industry is determined to be 5.05 yuan per share based on the same criteria, and the exchange ratio is calculated accordingly. According to the formula provided, the exchange ratio between China Shipbuilding Industry and China CSSC is 1:0.1335, meaning that every 1 share of China Shipbuilding Industry can be exchanged for 0.1335 shares of China CSSC. This transaction constitutes a major asset restructuring. After the implementation of this transaction, China CSSC will inherit all assets, liabilities, businesses, personnel, contracts, and all other rights and obligations of China Shipbuilding Industry. As the surviving company, China CSSC will significantly reduce competitive pressures from peers, effectively protect the rights and interests of minority shareholders, and further consolidate and enhance its core maritime business. The surviving company will integrate resources from both parties, optimize the industrial layout of the shipbuilding sector, leverage synergies, enhance core functions and competitiveness, and promote the development of the shipbuilding industry towards higher-end, greener, smarter, digitized, and standardized processes to build a globally competitive world-class shipbuilding enterprise. This restructuring will optimize the development layout of core shipyards, deepen the integration of core technology resources, maximize production efficiency in each major shipyard's respective competitive ship type areas, further enhance the global influence of China CSSC's manufacturing industry, and promote the internationalization of "China CSSC" standards. The company has applied to the Shanghai Stock Exchange for the resumption of trading of its stocks on September 19, 2024 (Thursday).