China Yuchai International Ltd., a manufacturer and distributor of engines for on- and off-road applications in China through its main operating subsidiary, Guangxi Yuchai Machinery Company Ltd., announced that its subsidiary, Guangxi Yuchai Machinery Monopoly Development Co. (GYMMD), has acquired the remaining 49 percent equity interest in Hunan Yuchai Machinery Industry Co. (HYMIC) from its joint venture partner, Hunan Chengwei Automobile Spare Parts Company Limited. As a result of the acquisition, HYMIC is now a wholly owned subsidiary of GYMMD.
The total consideration for the acquisition was RMB 6,694,500 (approximately $1.03 million USD), which was satisfied in cash and funded through internal resources.
The consideration for the acquisition was arrived at on a “willing-buyer willing-seller” basis, taking into consideration, among other things, the market value of a 100 percent equity interest in HYMIC as of June 30, 2017, of RMB 13,856,500 (approximately $2.13 million USD) based on an independent valuation performed by Beijing China Enterprise Asset Appraisal Co. (using the asset-based method of valuation) and commissioned by Hunan Chengwei and GYMMD. The consideration for the acquisition represents a discount of approximately 1.4 percent to the market value of the 49 percent equity interest as of June 30, 2017.