Midea Group Co., Ltd. (SZSE:000333) signed merger by share exchange agreement to acquire additional 47.3% in Wuxi Little Swan Company Limited (SZSE:200418) for CNY 14.4 billion on October 23, 2018. Midea Group Co., Ltd. will acquire shares and merge Wuxi Little Swan Company Limited in merger absorption by share exchange transaction. As per terms, Midea Group Co., Ltd. will acquire 202.5 million A shares at exchange ratio of 1:1.2110 and 96.8 million B shares of Wuxi Little Swan Company at exchange ratio of 1:1.0007. A total of 342.1 million shares of Midea Group Co., Ltd. will be issued at CNY 42.04 per share. All dissenting shareholders of Midea Group Co., Ltd., who exercise their acquisition claim of CNY 36.27 per share, will receive cash consideration on the implementation date of the acquisition claim for every valid share in the company and at the same time, will transfer the corresponding shares to Midea Group Co., Ltd. In order to protect the rights of shareholders of Wuxi Little Swan Company Limited, Midea Group will provide dissenting shareholders with cash option. Wuxi Little Swan Company Limited's A share dissenting shareholders' cash option price is CNY 41.85 per share and B share dissenting shareholders' cash option price is HKD 32.55 (CNY 28.8) per share.

As of April 16, 2019, after the completion of implementation of Wuxi Little Swan Co., Ltd.'s medium-term profit distribution, matters involved in the shares exchange merger through absorption shall be adjusted accordingly: Exchange price for Wuxi Little Swan Co., Ltd.'s B shares will be adjusted to CNY 38.07 per share, The exchange ratio for Wuxi Little Swan Co., Ltd.'s A shares will be adjusted to 1:1.11584206, The exchange ratio for Wuxi Little Swan Co., Ltd.'s B shares will be adjusted to 1: 0.90556613, The volume of shares to be issued by the company will be adjusted to 313,649,040 shares, Wuxi Little Swan Co., Ltd.'s A share dissenting shareholders' cash option price will be adjusted to CNY 37.85 per share and Wuxi Little Swan Co., Ltd.'s B share dissenting shareholders' cash option price will be adjusted to HKD 27.88 per share. As of May 23, 2019, the share exchange ratio of Wuxi Little Swan Co., Ltd.'s A share will be adjusted to 1:1.15144821, that is every one A share of Wuxi Little Swan can be exchanged with 1.15144821 share of Midea Group and the share exchange ratio of Wuxi Little Swan Co., Ltd.'s B share will be adjusted to 1:0.93446244, that is every one B share of Wuxi Little Swan can be exchanged with 0.93446244 share of Midea Group.

Titoni Investments Development Ltd. will not be part of this transaction and the shares held by it and Midea will be cancelled after this merger absorption by share exchange transaction. Midea Group Co., Ltd. or its subsidiary will take over all assets, liabilities, businesses, employees, contracts, all other rights and liabilities of Wuxi Little Swan Company. Post completion, Wuxi Little Swan Company Limited will be delisted and will cease to exist as a legal entity. On May 8, 2019, Midea distributed the acquisition request rights to the Wuxi Little Swan shareholders of the acquisition request registered on the registration date of the acquisition right and to to acquire the claim can do so on the filing date (the trading day between May 15, 2019 and May 21, 2019) at 9:30-11:30 am and 1:00 3:00 pm. Wuxi Little Swan's stock was suspended since May 8, 2019.

The deal is subject to approval from the China Securities Regulatory Commission, second directorate meeting and shareholders of Midea Group Co., Ltd. and Wuxi Little Swan Company Limited. The Board of Directors of Midea Group Co., Ltd. and Wuxi Little Swan Company Limited approved the deal. On December 21, 2018, the shareholders of Midea Group Co., Ltd and Wuxi Little Swan Company approved the transaction. On March 12, 2019, the transaction was approved by the China Securities Regulatory Commission. Wu Renjun, Chen Jianjian, Li Wei, Li Haoran, Li Chang, Liu Kun, Xu Jianbing, Feng Ziqiang, Wu Shaolei, Zhang Yang, Xie Cong and Ceng Zhanxiong of CITIC Securities Company Limited acted as financial advisors and Liu Xing and Wang Ying of Jiayuan Law acted as legal advisors for Midea Group. Chen Yijiang, Ceng Lingzhuang, Wang Wei, Ceng Zhengyang, Huang Di and Hu Jianbin of Shenwan Hongyuan Securities Underwriting Sponsor Co., Ltd. acted as financial advisors and Xu Pingwen, Tong Nan and Zhang Yongfeng of Shanghai Guangfa Law Firm acted as legal advisors for Wuxi Little Swan. Huang Meimei. Qiu Xiaoying, Zhang Xiaoying and Yao Wenping of PricewaterhouseCoopers Zhong Tian LLP acted as accountants for Midea Group and Wuxi Little Swan.