Haiguang to acquire Dawning in share swap, boost computing power

Dawning Information Industry (SSE:603019) will be acquired by Haiguang Information Technology in a share swap transaction, a move designed to consolidate China's computing power. Haiguang will issue A-shares to Dawning shareholders in exchange for their stock, after which Dawning will delist and Haiguang will assume all of Dawning's assets, liabilities, and operations. The transaction aims to strengthen Haiguang's position in chip design and expand into Dawning's expertise in high-end computing systems, storage, and data center infrastructure. To bolster the deal, Haiguang plans to raise supporting funds via A-share issuance to no more than 35 specific investors. This move is intended to cover merger expenses, debt repayment, and infrastructure projects. Haiguang's planned share swap comes after self-reporting the absence of abnormal stock trading in the 20 days before the company put a hold on trading. In its assessment, Dawning Information's board determined that fluctuations in share price didn't exceed the limits and was in compliance with listing regulations.