1.716 billion shares limited for sale merger of parent company transaction

Wanhua announcement! Limited sale of 1.716 billion shares, merger of parent company transaction completion of Wanhua new action, successful completion of reorganization, merger of parent company transaction completion, Wanhua Chemical Group Co., Ltd. is a globally operated chemical new material company, which always adheres to scientific and technological innovation as the first core competitiveness and continuously optimizes the industrial structure. Main businesses include: MDI, TDI, polyether polyol; polyurethane industry cluster, acrylic acid and ester, propylene oxide; petrochemical industry cluster, waterborne PUD, PA emulsion, TPU, ADI series; functional chemicals and materials industry cluster. It is understood that Wanhua chemical announced on February 14 that the transaction of merging parent company of Wanhua chemical has been completed, with shares increased from 2.734 billion to 3.14 billion, a net increase of 406 million, an increase of 14.85%. The issuing price of each share is determined to be 31.93 yuan, and 30.43 yuan / share after dividend adjustment. The asset delivery date is January 31, 2019, and the share registration and cancellation date is February 12, 2019.

1.716 billion shares are limited for sale, with a lock-in period of 36 months. It is reported that the controlling shareholder has become Guofeng investment, the actual controller is still Yantai SASAC, and the actual controller of the listed company has not changed. The latest equity structure is: two direct benefits after the merger 1. It solves the problem of horizontal competition. BC company is also an MDI production company. It has the problem of horizontal competition with the original listed company, which has been fundamentally solved. BC company will become a subsidiary of the listed company, and will be included in the overall strategic layout of the listed company. The listed company will become the world's largest MDI supplier, and will realize the layout of having (and preparing to build) production bases in three major markets in Asia, Europe and the Americas, so as to realize the production and operation of globalization and intercontinental linkage, and better respond to the global chemical industry The situation of increased concentration and intensified competition. 2. Improve the corporate governance mechanism. At present, both foreign investment (synthetic International) and management (Zhongcheng investment and China Kaixin) are directly holding shares, with a total of 30%. The governance mechanism has been improved. Wanhua production expansion plan Wanhua is a growing new chemical material company. Through R & D investment and international M & A, it extends the industrial chain, expands product categories, capacity scale, market scope and income scale.

Yantai Wanhua plans to expand 500000 tons of MDI in 2019, and Ningbo Wanhua plans to expand 300000 tons of MDI in 2020, totaling 800000 tons. In February and November, it was announced to invest US $1.25 billion to build 400000 tons of MDI capacity in the United States and put into production in 2021. In March and December, 300000 tons of TDI was put into operation. In January 2019, 50000 T / a MMA project and 80000 T / a PMMA project were announced to be put into production. Recalling that on August 16, 2018, the major asset restructuring project of Wanhua chemical was approved unconditionally by the merger and reorganization committee of listed companies under the CSRC. Wanhua chemical's absorption and merger of Yantai Wanhua Chemical Co., Ltd. and related transactions is the largest M & a project in domestic capital market in 2018, and also the largest cross-border M & a project of domestic enterprises along the belt and road in central and Eastern Europe. It is understood that Wanhua chemical was founded on January 30, 2018. It is a newly established company after the existence and division of Wanhua industry, the original controlling shareholder of the listed company. The actual controller is Yantai state owned assets supervision and Administration Commission. According to the separation agreement, 47.924% equity of Wanhua chemical, 25.5% equity of Wanhua chemical (Ningbo) Co., Ltd., 100% equity of Yantai Xinyi Investment Co., Ltd., 100% equity of Wanhua International Resources Co., Ltd., 100% equity of Yantai Xinyuan Investment Co., Ltd. and 100% equity of Yantai CHENFENG Investment Co., Ltd. held by the former Wanhua industry will be included in Wanhua chemical. After the completion of the division, the equity of borsodchemzrt (hereinafter referred to as "BC company") indirectly held by the former Wanhua industry will also be indirectly held by Wanhua chemical. Wanhua Chemical Co., Ltd. has absorbed and consolidated the controlling shareholder Yantai Wanhua Chemical Co., Ltd. with a price of 52.2 billion yuan.

By absorbing and merging the controlling shareholder Wanhua chemical, Wanhua chemical will achieve three goals: 1. Actively respond to the call of the state and lay out the "belt and road" entity business; 2. Through the acquisition of Hungarian BC company, the eighth largest MDI manufacturer in the world, Wanhua chemical will surpass BASF to become the world's largest MDI manufacturer (based on capacity); 3. Listing after the completion of this transaction The company will thoroughly solve the potential horizontal competition between the company and its controlling shareholder BC company, which is an important measure for the controlling shareholder to fulfill the commitment of the securities market. 1. "Wanhua" brand polyurethane synthetic leather products: won the title of "Shandong famous brand" in December 2005 and "China famous brand" in September 2005; 2. "Wanhua" brand polyisocyanate (MDI) products: won the title of "Shandong famous brand" in December 2003 and "China famous brand" in September 2006; 3 Wanhua Group ranks 99th among the "top 100 enterprises of Shandong Province in 2005" published by Shandong Bureau of statistics and Shandong survey team of National Bureau of statistics; Wanhua Group ranks 80th among the "top 100 industrial enterprises of Shandong Province in 2005"; 4. Wanhua Group ranks 110th among the "top 500 enterprises of China's chemical industry in 2005" (ranking by sales revenue) published by China Chemical Enterprise Management Association.