Semiconductor Manufacturing International Corporation (SMIC) plans to acquire the remaining 49% equity interest in its subsidiary SMIC Northern via a RMB40.6 billion (USD5.98 billion) share issuance in the largest restructuring on the Star Market to date.
The China Securities Regulatory Commission approved SMIC’s restructuring plan on 21 May 2026. AllBright Law Offices and Jingtian & Gongcheng advised on the transaction.
Wang Li, senior and lead partner on the project at AllBright, told China Business Law Journal: “This transaction will directly enhance the listed company’s net profit attributable to shareholders, improve asset quality and overall profitability, strengthen its sustainable operating capacity and core competitiveness, and fully safeguard the long?term interests of all shareholders.”
SMIC is dual listed on the HKEX and the Star Market of the SSE. The transaction marks the first restructuring involving an A+H red chip company and also sets a record for the largest M&A transaction in China’s domestic wafer foundry sector.
Prior to the restructuring, SMIC and its subsidiaries held a 51% stake in SMIC Northern. The remaining shareholders were China Integrated Circuit Industry Investment Fund (CICIIF) (32%), Integrated Circuit Investment Centre (9%), E Town International Investment (5.75%), ZGC Group (1.125%) and Beijing Industrial Investment (1.125%).
SMIC will issue approximately 547 million shares at RMB74.20 per share, representing 6.4% of its enlarged total share capital. On completion, SMIC will hold 100% of SMIC Northern.
AllBright acted as transaction counsel to SMIC, with Wang leading the team, which comprised senior partners Shen Cheng and Ark Bao, and partners Yang Jiwei, Lu Qingchuan, Zhong Hang and Xu Jingjing. Jingtian & Gongcheng advised SMIC on Hong Kong listing approvals and information disclosure matters.
CICIIF subscribed for shares in SMIC Northern in May 2016 and August 2017, investing a total of USD1.54 billion. Following completion of the restructuring, CICIIF is expected to realise more than USD2 billion in proceeds from the transaction.
The transaction was announced on 29 August 2025, which the SSE accepted on on 25 February 2026, and approved by the exchange’s M&A and Restructuring Committee on 11 May 2026. The review process from acceptance to approval took less than three months.
