China's Huafon Chemical Plans to Acquire Two Polyurethane Assets for RMB 6.85 Billion

en.Wedoany.com Reported - On September 2, Huafon Chemical disclosed a report on the proposed acquisition of assets through share issuance and cash payment, along with a connected transaction statement, planning to acquire 100% equity in Zhejiang Huafon Synthetic Resin Co., Ltd. and Zhejiang Huafon Thermoplastic Polyurethane Co., Ltd., with a total transaction price of RMB 6.85 billion. Among this, the transaction price for Huafon Synthetic Resin is RMB 4.15 billion, and for Huafon Thermoplastic Polyurethane is RMB 2.7 billion. This transaction constitutes a connected transaction but does not constitute a major asset restructuring or a restructuring for listing.

The transaction will be settled through a combination of shares and cash, with total cash consideration of RMB 1.02065 billion and share consideration of RMB 5.82935 billion. Huafon Chemical plans to issue approximately 689.9 million shares to the transaction counterparties at RMB 8.45 per share. Among this, the acquisition of Huafon Synthetic Resin involves cash payment of RMB 618.35 million and share consideration of RMB 3.53165 billion; the acquisition of Huafon Thermoplastic Polyurethane involves cash payment of RMB 402.3 million and share consideration of RMB 2.2977 billion.

Huafon Synthetic Resin primarily engages in the production of leather-use polyurethane resin and related products, as well as businesses such as resource recycling and polyester polyol processing. In 2025, the company achieved operating revenue of RMB 2.913 billion and net profit of RMB 326 million; in the first half of 2026, operating revenue reached RMB 1.417 billion and net profit was RMB 151 million. Huafon Thermoplastic Polyurethane focuses on the R&D, production, and sales of thermoplastic polyurethane elastomers (TPU), achieving operating revenue of RMB 3.372 billion and net profit of RMB 214 million in 2025, and operating revenue of RMB 1.896 billion with net profit of RMB 155 million in the first half of 2026.

The transaction counterparties have also set performance commitments. Huafon Synthetic Resin commits to net profits of no less than RMB 324 million, RMB 342 million, and RMB 345 million for 2026 to 2028, respectively, with a cumulative total of no less than RMB 1.011 billion over the three years; Huafon Thermoplastic Polyurethane commits to net profits of no less than RMB 256 million, RMB 278 million, and RMB 289 million for the same period, with a cumulative total of no less than RMB 823 million over the three years. The combined three-year committed net profits of the two targets amount to no less than RMB 1.834 billion.

Upon completion of this transaction, Huafon Chemical's existing businesses, including spandex, polyurethane prepolymer, and adipic acid, will be expanded to include leather-use polyurethane resin and TPU products. Prior to the transaction, Huafon Group, You Xiaoping, You Xiaohua, and You Jinhuan collectively held 66.05% of Huafon Chemical's shares. Based on the current plan, their combined shareholding is projected to rise to 70.19% after the transaction, with Huafon Group remaining the controlling shareholder and You Xiaoping remaining the actual controller of the company.

The plan has been reviewed and approved by the board of directors of Huafon Chemical. It still requires review and approval by the company's shareholders' meeting, as well as approval, registration, or consent from competent regulatory authorities before it can be implemented.