China Automation: Add 25% of Wuzhong Instrument to 50%

(January 25, 2011 - Hong Kong) One of China's largest supplier of railway signal system solutions and China Petroleum & Chemical Corporation's largest supplier of security and critical control system solutions - China Automation Group Co., Ltd. ( "China Automation", a stock code listed on the Hong Kong Stock Exchange: 0569) announced that the Group has entered into an acquisition agreement with a total cash consideration of RMB 100,00

China Petroleum & Chemical Corporation 8.0800.2002.538%
China Automation 6.000-0.010-0.166%

0,000 yuan to acquire 100% of the issued share capital of Kevin Investment (China) Co., Ltd. ("Covin China"), and it holds a 25% stake in Wuzhong Instrument Co., Ltd. ("Wuzhong Instrument"). The acquisition will allow the Group to have more flexibility in handling Wu Zhong Instrument's investment, and will enable the Group to obtain a higher share of the expected profit of Wuzhong Instrument.

After the acquisition is completed, the actual shareholding of the group in Wuzhong Instrument will increase from 25% to 50%. The Group will have the right to appoint an additional director to join the board of directors of Wuzhong Instrument and nominate the chairman of the board of directors through Corwin China. Therefore, the Group will occupy three seats in the five board seats of Wu Zhong Instrument's board of directors. The Group is also currently negotiating on the possible acquisition of a 30% stake in Wuzhong Instrument.

Wuzhong Instrument is a Sino-foreign joint venture and is mainly engaged in the production of industrial automatic control valves. The control valve is mainly used to receive information from the controller and press the information to switch the whole or part of the valve to control the flow, pressure, or liquid level.