Wanhua Chemical Plans to Acquire Shares of Tongling Chemical

On November 7, Wanhua Chemical announced that it plans to acquire part of the equity of Tongling Chemical, and Wanhua Chemical plans to split the Tongling Chemical after holding, and continue to retain the chemical business affiliated companies under the existing company, while the non-chemical business affiliated companies will be spun off to establish a separate company. After that, Wanhua Chemical will hold 51% of the Tongling Chemical, which is related to the chemical business, and obtain a controlling stake in the company. And hold 34% of non-chemical business related companies, despite being a non-controlling shareholder, but enjoy veto power on major matters.

According to the announced agreement, Wanhua Chemical and Tongling Chemical unanimously agreed that the evaluation base date is October 31, 2023. This involves the corporate equity of the separated Tongling chemical company and the separated non-chemical company. The transaction value shall not exceed RMB 6 billion, and shall be subject to the assessed value.

Wanhua Chemical believes that this participation in the reorganization of Tongling Group will be of great significance to Wanhua themselves.First of all, after the reorganization, Wanhua Chemical will obtain important upstream resources of phosphate rock and sulfur. While further improving its own upstream raw material supply chain, it will also greatly strengthen the battery business that Wanhua Chemical is investing in and expanding, enhancing the core competitiveness of this business segment.

Not long ago, the three giants Wanhua Chemical, Tongling Chemical, and China National Chemical Engineering Group signed a strategic cooperation agreement in Xiangyang, Hubei Province, China planning to invest 35 billion yuan to build a new energy industrial park involving new energy, high-end electronic chemicals, food grade phosphate, industrial grade phosphate and other products.

It has become a major trend in recent years for chemical companies to increase their investment in new energy. Wanhua Chemical has established a number of companies so far, covering lithium iron phosphate, ternary cathode, lithium hexafluorophosphate electrolyte, PVDF, NMP solvent, negative electrode binder and battery recycling and other materials, as the production capacity of the above-mentioned Hubei cooperation project is put into production, Wanhua's lithium battery industry chain business territory will further expand.