On the evening of November 16, Hainan Natural Rubber Industry Group Company Limited ("Hainan Rubber") announced that it would soon acquire Singapore-listed Hershey Agriculture, a subsidiary of Sinochem International.

According to the announcement, Hainan Rubber intends to acquire 36.00% of the shares of Hersheng Agriculture held by Sinochem New (a wholly-owned subsidiary of Sinochem International) in cash through an overseas SPV agreement, and at the same time trigger the mandatory tender offer obligation, Hainan Rubber will launch a mandatory tender offer for all the remaining shares of Hersheng Agriculture, and finally hold at least 36.00% of the shares of Hersheng Agriculture through an overseas SPV, and at most 70.80% of the shares of Hersheng Agriculture. The Company will eventually hold at least 36.00% of the shares of Hersheng Agriculture through overseas SPV, and at most 70.80% of the shares of Hersheng Agriculture, and Sinochem International will still indirectly hold 29.2% of the shares of Hersheng Agriculture. After the completion of the merger and acquisition, Hersheng Agriculture will become the controlling subsidiary of Hainan Rubber, and Hainan Rubber will become the world's largest natural rubber industry group.

The announcement shows that Hershey Agriculture, a subsidiary of Sinochem International, is a global natural rubber company headquartered in Singapore and listed on the Singapore Exchange Kelly Board in 2013, with business scope covering the entire rubber industry chain. The total annual production capacity is approximately 1.429 million tons.

On July 12, 2022, the State-owned Assets Supervision and Administration Commission of the State Council held a meeting to promote the deepening of specialization and integration of central enterprises, clearly proposing that "the synergy between the central and local governments should be strengthened to achieve joint development. Promote resource integration and cooperation with local state-owned enterprises in an orderly manner, and further enhance the core competitive advantages of enterprises while cultivating pillar industries that fit with local development positioning." . This merger and acquisition is a good fit for the requirements of the SOE reform, which "emphasizes specialization and integration, promotes the concentration of resources in the main business enterprises, advantageous enterprises and 'long chain' enterprises, and cultivates industry leaders", and is another typical example of central-local cooperation and joint development. It is also a major initiative to implement the three-year action plan for the reform of state-owned enterprises. By complementing each other's advantages and promoting each other, the two sides will help improve the allocation efficiency of natural rubber resources, enhance China's influence in the international natural rubber industry, and better guarantee the security of national strategic materials. The M&A is also a concrete embodiment of Hainan Province's use of international and domestic resources and two markets to serve and guarantee the national strategy, highlighting globalization thinking and whole industry chain thinking, helping to accelerate the high-quality construction and high-level opening of Hainan's free trade port, and helping to cultivate market players with core competitiveness and new advantages of cooperation and competition with Hainan characteristics.

Hainan Rubber, held by Hainan Reclamation Group, is the only listed company of natural rubber planting and processing in the domestic A-share market, holding R1 International of Singapore, one of the largest international rubber trading companies, and entrusted with the management of KM, the largest listed rubber processing company in Indonesia, and is the largest natural rubber planting and processing enterprise in China, with 3.41 million mu of rubber plantations, 38 secondary subsidiaries, 25 rubber base It has 3.41 million mu of rubber plantations, 38 secondary subsidiaries, 25 rubber base branches, 39 rubber processing plants, an annual rubber processing volume of nearly 800,000 tons and an annual rubber trading volume of about 1.7 million tons.

After the completion of this transaction, Hainan Rubber will be able to quickly acquire the overseas processing capacity of natural rubber and latex and enhance its competitiveness in the international market, as well as obtain the downstream customer resources of Hershey Agriculture, further enter the global natural rubber trade and expand the scale of the company's natural rubber trade business. In addition, Hainan Rubber will also acquire natural rubber plantations of Hershey Agriculture in Cameroon, Côte d'Ivoire and other emerging natural rubber producing areas, strengthening the layout of international planting resources. More importantly, this acquisition is not only the expansion of industrial scale for Hainan Rubber, but also a leap to achieve a change in transformation and development on the way to realize an international modern enterprise group and benchmark with world-class enterprises.