BUSINESS

Chinese Chipmaker Hygon to Buy Server Firm in $16 Billion Deal

Published: Jun. 10, 2025 5:05 p.m. GMT+8

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Chinese chipmaker Hygon Information Technology Co. (688041.SH) said it plans to acquire server manufacturer Dawning Information Industry Co., (603019.SH) or Sugon, through a share swap deal, as Beijing ramps up its push toward tech self-reliance.

Sugon shareholders will receive 0.5525 Hygon shares for each share held, according to details of the merger in a joint statement released by the Shanghai Stock Exchange Tuesday. This translates to a valuation of 115.967 billion yuan ($16 billion) for Sugon, representing a 28% premium over its market capitalization before the trading halt. Trading in both companies’ shares was halted on May 26 when a plan for the merger was announced.

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Hygon Information Technology Co. plans to acquire Dawning Information Industry Co. through a share swap, valuing Sugon at 115.967 billion yuan ($16 billion).
The merger will result in Sugon delisting and Hygon absorbing its assets, liabilities, staff, and operations.
This deal is the first publicly announced absorption merger between listed companies under China's revised M&A rules.

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Who’s Who

Hygon Information Technology Co.: Hygon Information Technology Co. is a Chinese chipmaker planning to acquire server manufacturer Dawning Information Industry Co. (Sugon) through a share swap. This merger aims to strengthen China's tech self-reliance. Both companies were added to the U.S. Entity List in 2019, prompting them to focus on domestic solutions. The acquisition is expected to enhance Hygon's vertical integration and system-level capabilities to better compete in the market.

Dawning Information Industry Co.: Dawning Information Industry Co., or Sugon, is a server manufacturer founded in 2006 in Tianjin. It is a major provider of server and cloud solutions, partly owned by the investment arm of the Chinese Academy of Sciences’ Institute of Computing Technology. Sugon is set to be acquired by Hygon Information Technology Co. in a share swap deal. After the merger, Sugon will delist from the Shanghai Stock Exchange, and Hygon will absorb all its operations.

Inspur Co. Ltd.: Inspur Co. Ltd. is a leading vendor in China's accelerated server market, holding a significant share alongside New H3C Technologies Co. Ltd. and NingChang. These companies collectively dominate over half of the market, which saw substantial growth in 2024 fueled by AI demand and IT investments.

New H3C Technologies Co. Ltd.: New H3C Technologies Co. Ltd. is a leading vendor in China's server market. The company, alongside Inspur Co. Ltd. and NingChang, collectively controls over half of the market share.

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