December 5, 2024 – Wuhan Shuangjian New Material Co., Ltd. (hereinafter referred to as “Shuangjian New Material”) has recently issued an “Announcement on the Termination of Major Asset Restructuring,” announcing the termination of its previously planned major asset restructuring to acquire a 100% stake in Jiangsu Fuqisen Co., Ltd. (hereinafter referred to as “Fuqisen”).
Looking back at the entire event, Shuangjian New Material submitted a suspension application to the stock exchange company on August 5th this year, planning to undertake a major asset restructuring. Subsequently, the company’s stocks were suspended from trading on August 6th and were originally scheduled to resume trading on September 6th, but later applied for an extension to September 30th. On September 27th, Shuangjian New Material announced that it would acquire a 100% stake in Fuqisen through a combination of share issuance and cash payment, with a transaction value of up to 95 million yuan. The share consideration was 27.53 million yuan, with an issuance price of 3.70 yuan per share and an issuance quantity of 7.44 million shares, accounting for 11.92% of the total share capital after issuance. The cash consideration amounted to 67.47 million yuan.
According to Color Masterbatch Industry Network, Shuangjian New Material and Fuqisen have strong complementarities in their businesses. Shuangjian New Material’s main business involves the research, development, production, and sales of industrial adhesive products and water-based resin products, while Fuqisen focuses on the research and development, as well as sales, of resins and curing agents for water-based industrial coatings. Shuangjian New Material originally hoped to acquire Fuqisen to expand its presence in the water-based resin market more rapidly, reduce competition, gain access to customer and channel resources, and increase market share. Additionally, the integration of both businesses was expected to enhance capacity utilization, create economies of scale, and further improve the company’s profitability and comprehensive competitiveness.
However, despite the complementary nature of their businesses and the seemingly perfect acquisition plan, changes in the market environment introduced uncertainties to the restructuring. In the latest announcement, Shuangjian New Material stated that, given the extended duration of this major asset restructuring and the significant changes in the market environment since the initial planning stage, continuing to push forward with the restructuring would involve considerable uncertainties and risks. To safeguard the interests of all shareholders, after careful consideration and friendly consultations with all transaction parties, the company decided to terminate this major asset restructuring.
Since its establishment, Shuangjian New Material has been committed to innovative research and development of chemical new materials applied to industrial adhesives, covering various fields such as epoxy, silicone, acrylate, polyurethane, and high-temperature inorganic adhesive and sealing materials. On the other hand, Fuqisen possesses strong research and development capabilities and rich technical accumulations in the field of resins and curing agents for water-based industrial coatings. Although this restructuring was not successful, both parties may still seek other forms of cooperation in the future to jointly promote the development of the water-based resin market.