Tantech Holdings Ltd. Signs Definite Agreement to Acquire Suzhou E Motors

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Tantech Holdings Ltd. (TANH) (“Tantech” or the “Company”), a leading manufacturer of bamboo-based charcoal products, announced today that it entered into a definite purchase agreement (the “Purchase Agreement”) to acquire Suzhou E Motors Co., Ltd. (“Suzhou E Motors”), a specialty electric vehicles and power batteries manufacturer based in Zhangjiazhang City, Jiangsu Province. Today’s announcement follows the execution of a framework agreement dated January 27, 2016 by and between the Company and the shareholders of Suzhou E Motors as previous announced.

Pursuant to the Purchase Agreement executed on May 2, 2016, the Company plans to acquire 100% equity interest in Suzhou E Motors with a total cash consideration of RMB 159,000,000 (approximately $25.2 million) and a share consideration of 3,250,000 restricted shares of the Company’s common stock. The transaction is expected to be consummated in two closings. The first closing calls for cash payment of RMB 129,000,000, of which RMB 50,000,000 has been paid by the Company as advance payment, and share payment of 2,500,000 restricted shares in exchange for the transfer of 70% equity interest in Suzhou E Motors to the Company. The second closing calls for cash payment of RMB 30,000,000 and share payment of 750,000 restricted shares in exchange for the transfer of the remaining 30% equity interest in Suzhou E Motors. All shares are subject to a 24-month restriction with 1/3 eligible for resale on the date of 12 months, 18 months, and 24 months, respectively, after each closing. The remaining RMB 6,500,000 will be withheld until Suzhou E Motors has satisfied its obligations as guarantor for a debt currently in default.

Subject to customary closing conditions, the Company expects the transaction to be consummated by the end of 2016.

Mr. Zhengyu Wang, Chairman and Chief Executive Officer of Tantech, commented, “Following months of due diligence and negotiations following the signing of a framework agreement on January 27, 2016, we are extremely pleased to reach this definite Purchase Agreement with the shareholders of Suzhou E Motors today, which will allow us to eventually gain 100% control of Suzhou E Motors through a two-step closing process and inch us closer to transforming Tantech from a bamboo-based charcoal products producer to a vertically integrated company along the EDLC Carbon – battery – specialty new energy vehicle value chain.”

Mr. Wang continued, “Suzhou E Motors offers a unique opportunity for us to tap into the quickly evolving specialty new energy vehicles market which grew explosively last year. According to data compiled by China Association of Automobile Manufacturers, new energy vehicles sales in China increased by 342% to 331,092 units in 2015 from 74,763 units in 2014. With continuing governmental support and incentive programs, the strong momentum is poised to extend, benefitting us as we expand our footprint along the new energy vehicle value chain.”

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