03. Sep 2026
Huafon Chemical approves CNY6.85bn resin and TPU acquisition
Huafon Chemical’s board has approved a CNY6.85 billion ($960 million) related-party deal to acquire two polyurethane businesses from its controlling shareholder and members of the company’s founding family.
The Chinese producer plans to acquire 100% of Zhejiang Huafon Synthetic Resin and Zhejiang Huafon Thermoplastic Polyurethane. The businesses will become wholly owned subsidiaries of the Shenzhen-listed company if the transaction receives shareholder and regulatory approval.
Huafon Synthetic Resin produces polyurethane resins for synthetic leather, while Huafon Thermoplastic Polyurethane manufactures TPU for applications including footwear, electronics, sporting goods, automotive components, tubing, cable and film.
Huafon Chemical currently produces spandex, polyurethane systems and adipic acid. It said the acquisitions would extend its polyurethane value chain into leather resins and TPU while creating potential purchasing, manufacturing, research and sales synergies.
The transaction values Huafon Synthetic Resin at CNY4.15 billion and the TPU company at CNY2.70 billion. Huafon Chemical intends to pay approximately CNY1.02 billion in cash and issue around 690 million shares for the remaining CNY5.83 billion.
The company’s controlling shareholder, Huafon Group, owns 51% of Huafon Synthetic Resin and all of Huafon Thermoplastic Polyurethane. Huafon Chemical’s controlling shareholder and ultimate controller will remain unchanged following the transaction.
The latest proposal follows an earlier attempt to transfer the two businesses into the listed company. Shareholders rejected a CNY6 billion acquisition proposal in April 2025 after it failed to secure the required two-thirds majority. Huafon Chemical restarted the process in June 2026.
The revised valuation is approximately 14% higher than the price proposed in 2025. However, the proposed share price has increased from CNY6.14 to CNY8.45, while shares issued to the sellers will be locked up for at least 36 months.
Two directors connected with the sellers abstained from the board vote. The transaction will now be submitted to a shareholder meeting, at which related shareholders will also be required to abstain.
Photo: HQ of Huafon Thermoplastic Polyurethane (© Huafon)