On September 2nd, according to Caixin Global, China CSSC plans to merge with China Shipbuilding Industry, marking the beginning of a major reorganization in the shipbuilding industry.

Tonight, China CSSC and China Shipbuilding Industry announced that in order to further focus on national strategic priorities, accelerate the high-quality development of shipbuilding assembly business, regulate industry competition, and improve the operational quality of the listed company, China CSSC and China Shipbuilding Industry are planning to merge through China CSSC issuing A-shares to all shareholders of China Shipbuilding Industry and exchanging shares.

The announcement stated that this transaction constitutes a related party transaction and is expected to constitute a major asset restructuring as stipulated in the "Management Measures for Major Asset Restructuring of Listed Companies." This transaction will not result in a change in the actual controller of the company.

Both companies announced that the stocks will be suspended from trading starting September 3, 2024 (Tuesday), with an estimated suspension period of no more than 10 trading days.

According to the announcements of both companies, on September 2, 2024, China Shipbuilding Industry and China CSSC signed an "Intent Agreement for Absorption and Merger," with the main details as follows:

1. China CSSC plans to issue A-shares to all shareholders of China Shipbuilding Industry and exchange shares to absorb and merge China Shipbuilding Industry.

2. The specific transaction plan, share exchange price, debt handling, employee arrangements, dissenting shareholder protection mechanisms, and other arrangements will be communicated, discussed, and negotiated by both parties and stipulated in the formal transaction agreement. Both parties should actively cooperate and make every effort to promote this merger and complete the signing of the formal transaction agreement.

3. This agreement is only a preliminary memorandum of understanding between the two parties. The specific rights, obligations, and arrangements of the two parties in this merger are subject to the formal transaction agreement finally signed by both parties.

4. The premise of this transaction is that the formal transaction agreement signed by the two parties shall be implemented formally after being reviewed and approved in accordance with the relevant regulations of both parties' company articles and obtaining the approval of the relevant regulatory authorities.

5. The agreement can be terminated/cancelled by mutual agreement.

China CSSC and China Shipbuilding Industry are both large shipbuilding enterprises with a market cap of over a hundred billion. As of today's close, China CSSC's total market cap is 156.1 billion yuan, and China Shipbuilding Industry's total market cap is 113.6 billion yuan. Both companies are controlled by the State-owned Assets Supervision and Administration Commission of the State Council.

It is worth mentioning that both companies' stocks experienced a significant decline today. As of today's close, China CSSC's stock price plummeted by 9.04%, closing at 34.90 yuan/share. China Shipbuilding Industry's stock price dropped by 6.39%, closing at 4.98 yuan/share.

Earlier today, relevant personnel from China CSSC responded to the sharp decline in stock prices, stating that they are not clear about the reason for the stock price decline. They mentioned that the company's production and operation are normal at the moment. Additionally, the company's performance in the first half of the year was good, with all major financial indicators showing year-on-year growth.