Overview of the Merger - The merger involves Zhejiang Huhangyong Expressway Co., Ltd. absorbing Zhejiang Zhanyang Development Co., Ltd. through a share exchange, with Zhejiang Huhangyong as the absorbing party and Zhejiang Zhanyang as the absorbed party [10][23] - After the merger, Zhejiang Zhanyang will terminate its listing and eventually deregister as a legal entity, while Zhejiang Huhangyong will inherit all assets, liabilities, and rights of Zhejiang Zhanyang [10][23] Share Exchange Details - The share exchange ratio is set at 1:1.0800, meaning each share of Zhejiang Zhanyang will be exchanged for 1.0800 shares of Zhejiang Huhangyong [12][13] - The issuance price for Zhejiang Huhangyong's A shares is set at RMB 13.50 per share, with a premium of 29.83% over the average price of Zhejiang Zhanyang's shares [11][12] Financial Implications - As of the signing of the proposal, Zhejiang Zhanyang has a total share capital of 441,895,215 shares, leading to the issuance of approximately 477,246,833 shares of Zhejiang Huhangyong for the merger [13] - The merger is classified as a major asset restructuring, with Zhejiang Huhangyong's total assets exceeding 50% of Zhejiang Zhanyang's total assets as of the end of 2024 [27] Regulatory and Compliance Aspects - The transaction is considered a related party transaction due to both companies being controlled by the same entity, the Transportation Group [27] - The merger does not constitute a restructuring listing, as there has been no change in control within the last 36 months [27] Cash Dividend Policy - Following the merger, Zhejiang Huhangyong plans to implement a cash dividend policy, ensuring a minimum annual cash distribution of RMB 0.4100 per share for the next three years, subject to legal and regulatory compliance [28] Business Impact - The merger is expected to enhance Zhejiang Huhangyong's operational capabilities, as it combines its expressway management expertise with Zhejiang Zhanyang's focus on chemical products, including chlor-alkali products and high-purity hydrogen [28]