On October 23, 2024, ASMPT Limited (“ASMPT“, stock code 0522.HK), a company listed on the main board of the Hong Kong Stock Exchange, and Shenzhen Original Advanced Compounds Co., Ltd. (“Zhizheng“, stock code 603991.SH), a company listed on the main board of the Shanghai Stock Exchange, announced that Zhizheng intends to acquire 99.97% of the shares of Advanced Assembly Materials International Limited (“AAMI”) from 14 counterparties. Those counterparties include ASMPT’s wholly-owned subsidiary ASMPT Hong Kong Holding Limited. This acquisition will be achieved through asset swap, share issuance, and cash payment. Additionally, Zhizheng will dispose of 100% equity in its wholly-owned subsidiary Shanghai Original Advanced Compounds Co., Ltd., and raise supporting funds (“transaction”).

In this transaction, ASMPT’s wholly-owned subsidiary will sell its 49% stake in AAMI to Zhizheng. Zhizheng will pay share and cash consideration to ASMPT’s subsidiary. After the transaction, ASMPT will hold at least 20% of Zhizheng’s shares. The specific disclosures regarding this transaction will be based on the announcements issued by ASMPT and Zhizheng. This transaction constitutes a material asset restructuring of Zhizheng, subject to the approval and filing procedures of the stock exchange and securities regulatory authorities. The completion of the transaction is also subject to the satisfaction of conditions precedent provided in the transaction documents. This transaction aligns with China’s M&A policies to encourage transforming and upgrading new quality productive forces, strengthening the resilience and security of the semiconductor supply chain, and attracting more high-quality foreign investments into China’s A-share market for long-term investment.

Headquartered in Singapore, ASMPT is a global leader in semiconductor packaging equipment and the largest supplier of surface-mount technology solutions. ASMPT is the only company worldwide that provides high-quality solutions for all key steps in electronics manufacturing process, and offers solutions to a vast range of end-user devices, including electronics, mobile communications, computing, automotive, industrial, and LED (display).

AAMI is one of the top five global suppliers of lead frames. Initially part of ASMPT’s materials division, AAMI became a joint venture in 2020 with investments from ASMPT, Wise Road Capital, and other investors. AAMI specializes in the design, development, production, and sale of lead frames. It has manufacturing plants in Chuzhou (Anhui province), Shenzhen (Guangdong province), and Malaysia. AAMI has been deeply involved in the lead frame sector for over 40 years, with products widely used in industries such as automotive, computing, communications, and consumer semiconductors. It is a global leader in sales volume, product quality, and technology.

After acting as ASMPT’s PRC legal counsel and assisting ASMPT in converting AAMI into a joint venture in 2020, Fangda has continued to assist in the planning and advancing of the current transaction, including transaction design, regulatory compliance for HKEx-listed and A-share companies, and drafting and negotiating transaction documents. The transaction not only involved the material asset restructuring and asset swap of an A-share listed company but also involved cross-border M&A, cross-border share swap, foreign strategic investments, and other complex regulatory issues. The successful completion of this transaction will undoubtedly promote the cross-border integration and capital operations in China’s semiconductor industry.

The Fangda team was led by partners LUO Ke and Aaron CHEN. Key team members included counsels Napoleon ZHAO and Johnny CHEN, as well as associate Alicia XU.