GCL Technology Holdings said on 19 October 2026 that it had signed a non-binding memorandum of understanding to acquire about 81.91% of Sichuan GCL Lithium Battery Technology for a preliminary RMB2.5bn.
Why GCL Technology Holdings Limited is buying Sichuan GCL Lithium Battery Technology Co., Ltd. (c.81.91%)
The target makes lithium iron phosphate cathode materials in Renshou County, Sichuan, with annual capacity of 120,000 tonnes. Coverage of the announcement presents the deal as a way for GCL Technology to lessen its dependence on polysilicon and wafer price cycles.
Deal terms and financing
The final price will be set by an independent valuation. GCL Technology would pay about RMB650m in cash and about RMB1.85bn in new shares issued at no less than the June 2026 net asset value of about HK$1.30 per share. The vendor guarantees combined adjusted net profit of at least RMB620m for 2027 and 2028 and has also committed the target to developing a sixth-generation LFP cathode product by the end of 2028.
Regulatory approvals and timing
The vendor, GCL Group Limited, is an associate of chairman Zhu Gongshan and vice-chairman Zhu Yufeng, so any deal would be a connected transaction under Chapter 14A of the Hong Kong Listing Rules and may also be a notifiable transaction. No definitive agreement has been signed.
Market context
The target would become a non-wholly owned subsidiary of GCL Technology and be consolidated into its accounts. The MOU sets a three-month exclusivity period, and GCL Technology has a right to match any materially better binding third-party offer.
