HONG KONG, Jan. 29, 2023 /PRNewswire/ -- On 27 January 2023, Global New Material International Holdings Limited ("Global New Material International" or the "Company", Stock Code: 06616.HK) is pleased to announce that the Company will purchase approximately 3.13 million shares of CQV Co. Ltd. ("CQV", Stock Code: 101240.KS) and subscribe for about 1.18 million CQV Treasury Shares in the form of the consideration shares and cash consideration in aggregate amount of approximately RMB 470 million. Upon the completion, the Company will hold directly and indirectly 42.45% of the issued shares of CQV in aggregate and will become the single largest shareholder of CQV.

The Company is principally engaged in the production and sales of pearlescent pigment products and synthetic mica powder in China. It provides various product series of pearlescent materials and synthetic mica, offering more than 900 different types of products used in industrial, exterior and cosmetic applications. The Company is known as the largest pearlescent pigment producer in China and the fourth largest globally based on 2021 revenue.

CQV, the acquisition target, is one of the world's top pearlescent pigment companies as well as the largest pearlescent pigment player in Korea. With over 20 years of commitment to the pearlescent pigment industry, CQV has developed world-leading synthetic mica product offers and mature technology to produce high-end pearlescent materials applied in industrial, automotive and cosmetic sectors.

Global New Material International has been seeking overseas investment opportunities through cross border M&A which can provide growth potential and increase shareholder value. This acquisition offers a good opportunity for the Company to demonstrate its business presence in the global pearlescent pigments industry, which is consistent with its business strategies and is expected to unleash significant synergies between CQV and the Company.

The key driver for the development of pearlescent material market is to create color with better texture and performance, leveraging the trend of consumption upgrading in the pigments industry. Frost & Sullivan estimates a growth rate of over 23% in the global pearlescent industry in the future.

Global New Material International Pearlescent Factory (Phase II) has a total capacity of 30,000 tons and the first 6,000 tons of capacity has started test production. The increase of the production capacity will significantly improve production efficiency by achieving economies of scale, driving the growth of pearlescent pigments business. Moreover, CQV's smart factory has been completed. After the acquisition, CQV is expected to benefit from the ample supply of synthetic mica from the Company and thus rapidly release its production capacity.

According to the agreement, through this acquisition, Global New Material International would benefit from the in-depth industry experience and know-how as well as wide market presence of CQV, thus increasing its market share, enhancing its product offerings and improving its overall competitiveness.

CQV operates an extensive sales and distribution network covering more than 100 countries and regions globally and maintains a wide customer base of prestigious international companies. Through this transaction, Global New Material International will be able to expand its global sales by consolidating sales network of CQV. With regard to its product matrix, as the Company has more than 900 product types and CQV has over 800 product types, the merge of the two entities could significantly enrich the Company's product portfolio and allows for a coverage of wider application fields.