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GCL Technology moves to buy LFP cathode maker from founder’s group

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GCL Technology moves to buy LFP cathode maker from founder’s group

GCL Technology Holdings has signed a non-binding memorandum of understanding to acquire about 81.91% of Sichuan GCL Lithium Battery Technology, an LFP cathode material producer, from Golden Concord Group, the parent group controlled by GCL Technology’s chairman, Zhu Gongshan, and his family.

The preliminary price is about CNY 2.5 billion, according to the Hong Kong-listed company’s filing. About CNY 650 million would be paid in cash and about CNY 1.85 billion in new GCL Technology shares, issued at no less than HK$1.30 each, or up to about 1,671 million shares. The final price will be based on an independent valuation.

Because the seller is controlled by the chairman’s family trust, the deal would be a connected transaction under Hong Kong listing rules. GCL Technology said it expects to seek a specific mandate from independent shareholders to issue the new shares. It has 30 days for due diligence and three months of exclusivity to negotiate a formal agreement.

The seller has guaranteed combined adjusted net profit of at least CNY 620 million for the target in 2027 and 2028. It has also committed to developing a sixth-generation LFP cathode material with a compacted density above 2.8 g/cm³ by the end of 2028, and would pay compensation if either target is missed.

Sichuan GCL Lithium, based in Meishan, Sichuan province, has annual LFP production capacity of 120,000 tons at its first-phase facility, which occupies about 355 mu of a planned 1,000-mu site. A June report published by GCL said the company began production in July 2023 and supplies Contemporary Amperex Technology Co.


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