BBMG Corporation — M&A Activity 2021

Dec 15, 2021

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北 京 金 隅 集 團 股 份 有 限 公 司 *** BBMG Corporation (a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 2009)**

OVERSEAS REGULATORY ANNOUNCEMENT ANNOUNCEMENT ON THE IMPLEMENTATION SITUATION OF TANGSHAN JIDONG CEMENT CO., LTD.’S MERGER OF BBMG JIDONG CEMENT (TANGSHAN) CO., LTD. AND OTHER RELATED MATTERS

This announcement is made by BBMG Corporation (the “ Company* ”) pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

1. The Preliminary Progress of The Transaction

At the 32nd Meeting of the Fifth Session of the Board of Directors of BBMG Corporation (hereinafter referred to as the “ Company ” and “ BBMG Corporation ”) on 31 March 2021, the Resolution on Matters Related to the Merger of BBMG Jidong Cement (Tangshan) Co., Ltd. by Tangshan Jidong Cement Co., Ltd., which agrees with the subscription of the newly issued shares of Tangshan Jidong Cement Co., Ltd. (hereinafter referred to as “ Jidong Cement ”) with 47.09% of equity interests of BBMG Jidong Cement (Tangshan) Co., Ltd. (hereinafter referred to as the “ Joint Venture ” or the “ Target Company ”) held by Company, and Jidong Cement will perform the merger of the Joint Venture (hereinafter referred to as the “ Transaction ” or the “ Merger ”). In addition, in the Merger, the Company or any third party designated by the Company will act as the provider of cash option and cash-settled consideration to the dissenting shareholders of Jidong Cement who have validly declared the exercise of the cash option to acquire the corresponding shares of Jidong Cement. On the same day, the Company signed the

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conditional Merger Agreement with Jidong Cement and the Joint Venture. For details, please refer to the relevant announcement of the Company disclosed on China Securities Journal, Shanghai Securities Journal, Securities Times, Securities Daily and at the website of Shanghai Stock Exchange (www.sse.com.cn) on 1 April 2021.

On 25 June 2021, the 2nd Meeting of the Sixth Session of the Board of Directors of the Company considered and approved the Resolution on Matters Related to Tangshan Jidong Cement Co., Ltd.'s Merger of BBMG Jidong Cement (Tangshan) Co., Ltd. the Resolution on Matters in Performance Compensation for Tangshan Jidong Cement Co., Ltd.'s Merger of BBMG Jidong Cement (Tangshan) Co., Ltd., and the Resolution on Confirming the audit reports and appraisal reports involved in Tangshan Jidong Cement Co., Ltd.'s Merger of BBMG Jidong Cement (Tangshan) Co., Ltd., which agree with the specific program of the Merger, performance compensation, confirmation of relevant audit and appraisal reports and other related matters. On the same day, the Company signed the Supplemental Agreement to the Merger Agreement with Jidong Cement and the Joint Venture, and the Performance Compensation Agreement with Jidong Cement. For details, please refer to the Company’s relevant announcement on 26 June 2021 on China Securities Journal, Shanghai Securities News, Securities Times, Securities Daily, and the website of the Shanghai Stock Exchange (www.sse.com.cn).

On 3 November 2021, Jidong Cement received the “Approval of Tangshan Jidong Cement Co., Ltd.’s Issuance of Shares for the Merger of BBMG Jidong Cement (Tangshan) Co., Ltd. Along with Raising Matching Funds” (《關於核准唐山冀東水泥股份有限公司吸收合併金隅冀東水 泥（唐山）有限責任公司並募集配套資金的批復》) (Zhengjian Approval [2021] No. 3461) ( 證監許可 [2021]3461 號 ), issued by China Securities Regulatory Commission and China Securities Regulatory Commission has approved the Transaction. For details, please refer to the announcement of the Company dated 4 November 2021. So far, the Transaction has completed and performed all the required decision-making and approval procedures.

2. The Implementation Situation of The Transaction

(I) Closing of the Underlying Assets

According to the Merger Agreement and its Supplemental Agreement, Jidong Cement is the merging party, and the Joint Venture is the merged party. After the completion of the Merger, Jidong Cement, as the surviving company, will assume and undertake all the assets, liabilities,

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personnel, business, contracts and other rights and obligations of the Joint Venture, and the legal person status of the Joint Venture will be deregistered.

On 9 November 2021, the Company, Jidong Cement and the Joint Venture entered into the Asset Transfer Agreement, pursuant to which the parties agreed that 8 November 2021 would be the assets closing date of the Merger (hereinafter referred to as the “ Closing Date ”). Commencing on the Closing Date, all rights and obligations related to the 47.09% equity interests in the Joint Venture held by the Company have been transferred to Jidong Cement. Jidong Cement, as the surviving company after the Merger, will assume and undertake all assets, liabilities, personnel, business, contracts and other rights and obligations of the Joint Venture.

On 15 November 2021, the registration procedures for the industrial and commercial changes involved in the transfer of the 47.09% equity interest in the Joint Venture held by the Company to Jidong Cement have been completed. Upon the completion of the industrial and commercial changes, the Joint Venture became a wholly-owned subsidiary of Jidong Cement.

As at the date of this announcement, the Company, Jidong Cement and the Joint Venture have performed the closing procedures of the Merger in accordance with the Merger Agreement and its Supplemental Agreement. The relevant assets of the Joint Venture that need to go through the ownership change registration procedures will be transferred to Jidong Cement subsequently, and the Joint Venture will be deregistered. There are no substantial obstacles to the registration procedures for the change of ownership of these assets and the deregistration procedures of the Joint Venture.

(II) Details of the Capital Verification

On 16 November 2021, Shinewing conducted the capital verification for Jidong Cement in respect of the Merger and issued the Capital Verification Report of No. XYZH/2021BJAS10834. According to the above Capital Verification Report, the Joint Venture completed the change of the industrial and commercial registration of the equity interests, on 15 November 2021 and Jidong Cement issued 1,065,988,043 shares to BBMG Corporation at RMB12.78 per share.

(III) Implementation Situation of the Cash Alternatives

In the Merger, the Company, as the cash alternative provider, paid cash consideration to the dissenting shareholders of Jidong Cement who have effectively declared the exercise of the cash

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alternatives, and the Company was granted the corresponding shares of Jidong Cement. As of the date of this announcement, the cash alternatives have been implemented. During the declaration period of the cash alternatives, a total of 5,821,192 units of cash alternatives were effectively declared, and the Company was granted 5,821,192 shares of Jidong Cement and paid the cash consideration.

For details of the declaration and the implementation of the cash alternatives, please refer to the relevant announcements of Jidong Cement published on Cninfo website(www.cninfo.com.cn) on 25 November 2021, 30 November 2021, 2 -8 December 2021 and 13 December 2021, respectively.

(IV) Information on the Registration and Listing of the Shares Newly Issued by Jidong Cement to the Company

Jidong Cement newly issued 1,065,988,043 shares to BBMG Corporation, which were tradable shares subject to lock-up restrictions, with a lock-up period of 36 months. On 25 November 2021, the pre-registration of such shares was completed with China Securities Depository and Clearing Corporation Limited Shenzhen Branch.

On 16 December 2021, the 1,065,988,043 new shares of Jidong Cement obtained by the Company will be listed on the Shenzhen Stock Exchange, and the relevant shares have been included in the register of shareholders of Jidong Cement. The number of the shares of Jidong Cement directly held by the Company changed to 1,178,645,057 shares, representing approximately 47.53% of shareholding. The Company became a direct controlling shareholder from an indirect controlling shareholder of Jidong Cement.

(V) Profit or Loss Arrangement during the Transitional Period

According to the Merger Agreement and its Supplemental Agreement, during the transitional period commencing on the valuation benchmark date and ending on the Closing Date, the increase or decrease in the equity of the underlying assets due to operating profit or loss or other reasons shall be attributed to or borne by Jidong Cement.

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(VI) Matters Subsequent to the Transaction

Jidong Cement shall complete the subsequent matters related to the ownership change registration of the assets (including the assets of the branches and the equity interests of subsidiaries held by the Joint Venture) of the Joint Venture that need to go through the ownership change registration procedures and the merger and deregistration of the Joint Venture. The Company will continue to provide cooperation.

3. Effects of the Transaction to the Company

The Company obtained 1,065,988,043 shares of Jidong Cement through the Transaction, and its direct shareholding in Jidong Cement increased from 7.97% (before the Transaction) to 47.53% (after the Transaction), changing from an indirect controlling shareholder of Jidong Cement to a direct controlling shareholder of Jidong Cement. The total shareholdings of the Company and its controlling subsidiary (Jidong Development Group Co., Ltd.) in Jidong Cement increased from 40.36% (before the Transaction) to 66.00% (after the Transaction). The changes in shareholding structure of Jidong Cement before and after the Transaction are as follows:

Name of shareholders	Before the Transaction (after the implementation of cash alternatives)	Before the Transaction (after the implementation of cash alternatives)	After the Transaction	After the Transaction
	Number of shares held (share)	Shareholding percentage	Number of shares held (share)	Shareholding percentage
BBMG Corporation	112,657,014	7.97%	1,178,645,057	47.53%
Jidong Development Group Co.,Ltd.	457,868,301	32.39%	457,868,301	18.47%
Other A-share shareholders	843,127,836	59.64%	843,127,836	34.00%
Total	1,413,653,151	100.00%	2,479,641,194	100.00%

Meanwhile, through the Transaction, Jidong Cement undertakes the assets and business of the Joint Venture. Jidong Cement has become the cement business platform of BBMG Corporation and can grow stronger, better and bigger. Also, it is conducive to BBMG Corporation to streamline its level of equity investment and improve management efficiency.

Both Jidong Cement and the Joint Venture are consolidated into the financial statements of BBMG Corporation. The Transaction has no material impact on the assets operation and operating results of BBMG Corporation.

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It is hereby announced the above.

By order of the Board BBMG Corporation* Zeng Jin Chairman

Beijing, the PRC, 15 November 2021

As at the date of this announcement, the executive directors of the Company are Zeng Jin, Jiang Yingwu, Wu Dong and Zheng Baojin; the non-executive directors of the Company are Wang Zhaojia and Gu Tiemin; and the independent non-executive directors of the Company are Yu Fei, Liu Taigang, Li Xiaohui, Hong Yongmiao and Tam Kin Fong.

• English translation denotes for identification purposes only

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