Zhong Lun Law Firm is counselling chipmaker Hygon to acquire server giant Sugon through a share-swap deal, valued at RMB116 billion (USD16.1 billion) in a landmark M&A transaction involving a subsidiary acquiring the parent company and is the first of its kind in the A-share market.
The transaction is also the largest M&A deal in the mainland AI chip sector to date.
Zhong Lun Law Firm’s lead partner Zhang Ming and partner Tian Yaxiong are among the team members. The team has been assisting the Star Market-listed company on due diligence, negotiations and drafting transaction documents.
Hygon, which is now valued at RMB310 billion, focuses on the sale of core chips such as CPU and DCU. Its largest shareholder is Sugon, an SSE main board-listed company, holds 27% of its shares.
Once completed, this will be the first merger through absorption between two listed companies, after the China Securities and Regulatory Commission revised the Measures for the Administration of the Material Asset Restructurings of Listed Companies on 16 May.
The market value of the merged entity, whose name has yet to be announced, will exceed RMB400 billion. Sugon will be delisted, and Hygon will take on all its assets, debts and manpower.
A disclosure document filed with the SSE states the merger will facilitate both companies’ technological breakthroughs and enhance their competitiveness in their respective sectors by integrating manpower, capital, supply chains and resources.
