Chengdu Shengbang Seals is planning to acquire 60% equity in Wuxi WOCO Group in cash to achieve joint venture operation.

Chengdu Shengbang Seals (301233.SZ) announced that the company has signed a framework agreement with WOCO.F.J. Wolf Holding GmbH (referred to as "WOCO Group") regarding the acquisition of a 60% stake in Wuxi WOCO Engine Noise Reduction Parts Co., Ltd. ("Wuxi WOCO") in cash. The transaction reached a preliminary agreement between the two parties. The target of this acquisition, German WOCO Group, is a globalization family enterprise headquartered in Bad Sobernheim-Saarwellingen, Germany, with multiple factories and production facilities in Europe, NAFTA member countries in North America, and the Asian region. After the completion of this acquisition, the legal form of Wuxi WOCO will change to a Sino-foreign joint venture limited liability company established in accordance with Chinese laws, and the name of the joint venture company will be determined in the formal acquisition agreement, but it should include the words "Shengbang WOCO" or "WOCO Shengbang". The announcement stated that Chengdu Shengbang Seals and the target company's products are both used in the automotive field and complement each other well. Chengdu Shengbang Seals' products in the automotive field are mainly used in automobile engines, transmissions, axles, as well as new energy vehicle battery packs, motors, electronic control systems, etc.; the target company's products cover key categories such as automotive interior and exterior rubber and plastic products, engines, and electric drive motor assemblies, forming a clear product complementarity. At the same time, the customer bases of both parties also differ, with the target company having a higher proportion of revenues from European and American OEM customers and their joint venture brands, while Chengdu Shengbang Seals has a solid market foundation in mainstream domestic independent brands. After this acquisition is completed, Chengdu Shengbang Seals and the target company can leverage each other's mature sales channels and product strengths to strengthen the stickiness with their customers, and are expected to achieve a rapid improvement in operational performance.