On September 11, 2024, Auto Italia Holdings (00720.HK) announced that the buyer (the company's wholly-owned subsidiary) entered into a purchase agreement with the seller regarding the acquisition. According to the purchase agreement, the buyer conditionally agreed to acquire, while the seller conditionally agreed to sell the shares for sale (i.e., all the issued shares of the target company, Hudson Holding Limited), for a price of 0.166 billion Hong Kong dollars, to be settled through the issuance and allocation of consideration shares and the issuance of acceptance bills.
The consideration shares of 0.8 billion shares are equivalent to (i) approximately 15.12% of the current issued share capital of the company as of the date of this announcement; and (ii) approximately 13.13% of the expanded issued share capital of the company through the issuance and allocation of consideration shares.
The target company is a limited company registered in Samoa, mainly engaged in investment holding. As of the date of this announcement, the target company directly holds all the issued share capital of Hudson Hong Kong. Hudson Hong Kong is a limited company established in Hong Kong, mainly engaged in investment holding. As of the date of this announcement, Hudson Hong Kong directly holds 100% equity interest in Pingtan Datian.
Pingtan Datian is a limited liability company established in China, mainly engaged in the research and development and sales of auto parts and accessories, as well as the sales of electric vehicles and related accessories. As of the date of this announcement, Pingtan Datian directly holds 100% equity interest in Hudson Automotive Technology (Chongqing).
The target group adopts a light asset business model in the electric vehicle field, emphasizing minimizing capital expenditure and fixed assets (such as manufacturing facilities, manpower, and heavy machinery of traditional automobile companies). This model utilizes partnerships, outsourcing, and technology to provide services or products while having minimal tangible assets. The target group has strategically positioned itself by dedicating significant resources to the research and development of the electric vehicle market and obtaining multiple important licenses/patents in China and Europe. Through cooperation, adjustments, and improvements, the target group purchases electric vehicles from its partners in China (i.e., auto manufacturers and parts suppliers) to meet specific electric vehicle standards and export requirements in the European market. As mentioned above, the target group has received 81 electric vehicle orders from multiple car dealers in Europe. With the group's established experience and network of dealers, the board of directors believes that through the acquisition, the group can expand the coverage of its automotive-related business to the European electric vehicle market.
The board of directors believes that the acquisition will help the group capture potential opportunities in the European market and utilize the group's rich import-export and distribution experience to operate and develop its electric vehicle business in Europe. Taking into account (i) the significant growth expected in the European electric vehicle market under stricter government emission policies; (ii) the ability of the acquisition to allow the group to capture growing markets beyond its existing business segments; and (iii) the potential synergistic effects generated by the group's rich import-export and distribution experience, the board of directors believes that entering into the purchase agreement aligns with the group's strategy and presents a good opportunity to expand revenue sources and maximize shareholder returns.
