DeHeng Assisted Flying Technology in Completing Its Cross-Sector M&A of LINKVIC

2024-09-05

Recently, Flying Technology (stock code: 603488), a main board-listed company on the Shanghai Stock Exchange (SSE), acquired a 41.96% equity stake in Beijing LINKVIC Technology Co., Ltd. for a price of over RMB 350 million. By also obtaining a 27.87% voting right through a proxy voting arrangement, Flying Technology now holds a total of 69.83% of the voting rights in the latter, thereby achieving control over it. Lawyers Lin Lei, Long Wenjie, Fan Xiang, Qu Mingzhu, and other members of the project team from DeHeng’s Shanghai Office provided full-process legal services for this cross-sector M&A. 

This M&A project distinguished itself with its unique and innovative approach. Initially, Flying Technology planned to acquire a 100% equity stake in LINKVIC through a combination of share issuance and cash payment. This transaction was considered a significant asset reorganization and required approval from the SSE and registration approval from the China Securities Regulatory Commission (CSRC). However, to meet the cash exit requirements of LINKVIC’s investors and to expedite the M&A process, Flying Technology first invested in LINKVIC through capital increase and share transfer. Subsequently, the transaction plan was adjusted from acquiring assets through share issuance and cash payment to a cash acquisition.

Throughout the above process, the DeHeng project team fully leveraged their expertise and provided comprehensive legal services for Flying Technology in this M&A project, including regulatory compliance guidance, communication with regulatory authorities, structuring of the transaction plan and legal framework, legal due diligence, negotiation of the transaction, and drafting of transaction documents. They worked closely with the securities broker, accounting firm, and appraisal company, facilitating the effective implementation of Flying Technology’s acquisition plan.