On the evening of January 6, Qingdao Haier Biomedical Co., Ltd. and Shanghai RAAS Blood Products both released a major announcement: the plan for Qingdao Haier Biomedical Co., Ltd. to absorb and merge with Shanghai RAAS Blood Products has been terminated, and the stocks of both listed companies will resume trading from the start of the market on January 7.

Today, both Qingdao Haier Biomedical Co., Ltd. and Shanghai RAAS Blood Products saw significant drops after resuming trading. As of the time of writing, Qingdao Haier Biomedical Co., Ltd. has dropped over 10%, and Shanghai RAAS Blood Products has dropped over 5%.

Why was it terminated?

Looking back, on December 20, 2024, Qingdao Haier Biomedical Co., Ltd. and Shanghai RAAS Blood Products signed a "Intent Agreement for Absorption and Merger," intending for Qingdao Haier Biomedical Co., Ltd. to absorb and merge with Shanghai RAAS Blood Products by issuing A-shares to all shareholders of Shanghai RAAS Blood Products, while also raising matching funds through the issuance of A-shares. Due to the fact that this matter was still under planning and had many uncertainties, the stocks of Qingdao Haier Biomedical Co., Ltd. and Shanghai RAAS Blood Products were suspended from trading starting December 23, 2024.

However, just over a month later, this highly anticipated restructuring plan abruptly came to a halt. What exactly caused the plan to be shelved?

According to the announcements of the two companies, the transaction structure is relatively complex, and amidst repeated discussions and negotiations among the parties, a specific plan recognized by all relevant parties has not yet been formed. After prudent research into the opinions of the relevant parties and mutual agreement between the two parties to the transaction, in order to effectively protect the interests of the listed company and the vast number of investors, the two parties have decided to terminate the planning of this significant asset restructuring matter.

At the same time, the "Absorption and Merger Intent Agreement" automatically terminates, and neither party to the transaction bears liability for breach of contract. In addition, both companies have committed not to plan significant asset restructuring within one month from the disclosure of the announcement.

However, in order to stabilize market sentiment and enhance investor confidence, the two companies have also proposed a significant initiative of "stock buyback" at the same time they announced the termination of the restructuring.

Qingdao Haier Biomedical Co., Ltd. stated that the chairman proposed to repurchase the company's shares with self-owned funds, with an amount not less than RMB 0.1 billion and not exceeding RMB 0.2 billion. Shanghai RAAS Blood Products also proposed to repurchase the company's shares with self-owned funds, with an amount not less than RMB 0.25 billion and not exceeding RMB 0.5 billion.

"Snake" "Elephant" disparity.

Public information shows that Qingdao Haier Biomedical Co., Ltd. and Shanghai RAAS Blood Products are both important enterprises under Haier Group.

Qingdao Haier Biomedical Co., Ltd. focuses on the fields of life sciences and Medical innovation, providing integrated solutions for smart laboratories, digital hospitals, and smart blood use in various digital scenarios. Shanghai RAAS Blood Products, on the other hand, is a leader in China's blood product production sector, specializing in the production and sales of blood products, with main products including human serum albumin, immunoglobulin (such as intravenous immunoglobulin), and coagulation factor products.

The merger and integration of Qingdao Haier Biomedical Co., Ltd. and Shanghai RAAS Blood Products is considered a key part of Haier Group's strategic layout in the big health industry. Looking back at the previous announcements regarding mergers and reorganizations, Qingdao Haier Biomedical Co., Ltd. clearly explained the long-term significance of this merger. By integrating the resources of both parties, it is beneficial to improve its layout in the blood ecological Industry Chain and leverage synergistic value to promote high-quality development of the company.

It is noteworthy that this merger also aligns with national policy guidance, especially the eight measures issued by the China Securities Regulatory Commission to deepen the reform of the Star to support technological innovation and new quality productivity development, which encourages Star listed companies to carry out upstream and downstream merger integrations to enhance industrial synergy.

In terms of performance, Shanghai RAAS Blood Products has maintained relatively steady overall results in recent years. In 2023, Shanghai RAAS Blood Products achieved revenue of 7.964 billion yuan, a year-on-year increase of 21.27%, while the Net income attributable to shareholders was 1.779 billion yuan, showing a decline of 5.35% year-on-year, but the overall performance remains impressive.

In the first three quarters of 2024, Shanghai RAAS Blood Products' revenue reached 6.314 billion yuan, a year-on-year increase of 6.39%, with a Net income attributable to shareholders of 1.838 billion yuan, a year-on-year increase of 2.81%.

In contrast, Qingdao Haier Biomedical Co., Ltd.'s performance in recent years has not been satisfactory. In 2023, Qingdao Haier Biomedical Co., Ltd. had a revenue of 2.281 billion yuan, a year-on-year decrease of 20.36%, with a Net income attributable to shareholders of 0.406 billion yuan, a year-on-year decrease of 32.41%.

In the first three quarters of 2024, Qingdao Haier Biomedical Co., Ltd. reported revenue of 1.782 billion yuan, a year-on-year decrease of 2.43%, with a Net income attributable to shareholders of 0.309 billion yuan, a year-on-year decrease of 13.45%, facing certain performance pressure.

In terms of company size, there is also a significant gap between Qingdao Haier Biomedical Co., Ltd. and Shanghai RAAS Blood Products. As of the time of writing, Qingdao Haier Biomedical Co., Ltd. has a total market value of only 10.07 billion yuan, while Shanghai RAAS Blood Products boasts a total market value of 45.271 billion yuan, nearly four times that of Qingdao Haier Biomedical Co., Ltd.

For this reason, the Restructuring $ Merge was metaphorically viewed by the market as an "elephant swallowing a snake" from the very beginning and attracted significant attention. However, this astonishing attempt ultimately ended in failure.

As for the future, whether Qingdao Haier Biomedical Co., Ltd. and Shanghai RAAS Blood Products will attempt to move forward together again genuinely excites the market.