Wolong Electric Group Company Limited (SHSE:600580) made a proposal to acquire Hong Kong Wolong Holding Group Co., Ltd. from Zhejiang Wolong Shunyu Investment Co., Ltd. for CNY 2.1 billion in cash and stock on January 7, 2013. Wolong Electric Group Company will issue 422.80 million of its shares to acquire its 85% stake in Hong Kong Wolong and will acquire Wolong Investment's 15% stake in Hong Kong Wolong by paying CNY 313.37 million in cash. As of September 30, 2012, Hong Kong Wolong had total assets of CNY 2.64 billion and total liabilities of CNY 1.46 billion. From January 2012 to September 2012, Hong Kong Wolong had revenue of CNY 2.1 billion, operating profit of CNY 99.94 million, total profit of CNY 130.6 million, and net profit attributable to parent company's shareholder of CNY 82.16 million. As of July 4, 2013, Wolong Electric announced that issue price has been adjusted from CNY 4.25 per share to CNY 4.2 per share.

As on January 7, 2013, Wolong Investment's shareholders approved the transaction. The Supervisory Board of Wolong Electric Group Co., Ltd. resolved the transaction and entering into a framework agreement on January 8, 2013. The Board of Directors of Board of Wolong Electric Group Co., Ltd. approved the transaction on January 8, 2013. The transaction is subject to approval of Wolong Electric Group Co., Ltd.'s Director, after the audit and appraisal of the Hong Kong Wolong assets, shareholders of Wolong Electric, merger, acquisition and reorganization examination committee of listed companies of CSRC, National Development and Reform Commission, Ministry of Commerce, Wolong Investment's shareholders' meeting and approvals of relevant government departments. As of March 29, 2013, Wolong Electric Group decided to convene special shareholders' meeting to approve the transaction on April 15, 2013. The shareholder's meeting approved the transaction on March 29, 2013. The shareholders of Wolong Electric approved the entering into a framework agreement on April 15, 2013. As on June 27, 2013, the deal received the approval from the Merger, Acquisition and Reorganization Examination Committee of Listed Company of CSRC. Haitong Securities Co., Ltd. acted as financial advisor to Wolong Electric Group Company Limited. King & Wood acted as legal advisor for Wolong Electric Group Company.

On May 30, 2013, National Development and Reform Commission approved the transaction. On June 6, 2013, the Ministry of Commerce of the People's Republic of China approved the transaction. On July 2, 2013, The transaction has been approved by Board of Directors of Wolong Electric Group Company Limited.