Key words: Wanhua Chemistry; Wanhua Chemical Industry; MDI

Wanhua Chemistry (31.53 + 1.06%, diagnostic stock) is moving from "China Wanhua" to "World Wanhua". An important event is that on August 16, 2018, Wanhua Chemical Major Asset Restructuring Project was unconditionally approved by the Securities Regulatory Commission.

12 days from acceptance to the meeting, such a speed has also aroused concern. But as the spokesman of the Securities Regulatory Commission, Chang Depeng, said at the press conference, "As a representative of state-owned high-tech listed companies, Wanhua Chemistry's application for merger and acquisition can be examined and passed quickly, which reflects the firm determination of the Securities Regulatory Commission to support the merger and reorganization of listed companies." Since then, some media have noticed that the pace of domestic mergers and acquisitions has accelerated significantly.

52 billion 200 million yuan, Wanhua chemical absorbed and merged Wanhua chemical industry, and basically booked the most important part of China's M & a market in 2018. It is also the largest cross-border merger and acquisition project undertaken by domestic enterprises in central and Eastern Europe. It determines the ownership of the world's first MDI throne.

Moody's, a world-renowned rating agency, upgraded Wanhua Chemical Rating from Baa3 to Baa2 in a timely manner, with a stable outlook. Moody's believes that Wanhua Chemicals will become the world's largest MDI manufacturer with a total capacity of 2.1 million tons per year after the merger of Wanhua Chemicals. Meanwhile, with the successive production of PC and TDI, related diversification has been further improved and sustainable profitability has continued to increase.

In Wanhua Chemistry's view, this restructuring is a key step for the company to seize the major strategic opportunities to move towards the world, with many actions taken. By absorbing and merging Wanhua chemical industry, Wanhua chemical will realize the layout of the entity business along the "one belt and one road" line. By acquiring Hungary BC, the eighth largest MDI manufacturer in the world, Wanhua Chemicals will become the world's largest producer of MDI (in terms of capacity). At the same time, this action will thoroughly solve the potential competition problem with BC company, which is the subordinate of controlling shareholder.

MDI is a chemical product with high technology threshold. It has been controlled by Dow and Basf for a long time. Wanhua Chemicals has gradually broken the monopoly by tackling key technical problems and grown into the only MDI manufacturer in China. At the same time, the company also actively uses M&A means to find opportunities around the world. In 2011, for the first time, the company extended its production tentacles to Europe. Wanhua Chemical's controlling shareholders invested 1.26 billion euros to acquire Hungary's largest company and BC, the eighth largest MDI supplier in the world. The acquisition was awarded the Best Reorganization Transaction Award in Europe, Middle East and Africa in 2010 by International Financial Review. Seven years ago, mergers and acquisitions with controlling shareholders of listed companies as the main body "ultimately achieved satisfactory results for all parties concerned", also laid the groundwork for the Wanhua chemical restructuring.

The restructuring and acquisition of BC is still on the way, and Wanhua Chemicals has never stopped moving towards the global stage. On November 16, Wanhua Chemical announced that Wanhua Chemical US Operations LLC, a subsidiary of Wanhua Chemical US, would establish a 400,000-ton MDI plant and an integrated supporting plant in Louisiana, USA, with an investment of about $1.25 billion.

Starting from Yantai, we have our own production bases in Ningbo and Zhuhai. The acquisition of BC expands the production territory to Europe. After 2021, Wanhua Chemistry will also have its own factories in the United States. With the completion of the restructuring, Wanhua Chemistry will surpass Basf and become the world's largest MDI manufacturer. "China Wanhua" has successfully moved towards "World Wanhua".

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