SHANGHAI -- Universal Scientific Industrial, also known as Huanxu Electronics, has signed a preliminary letter of intent to acquire the parent company of AsteelFlash for an undisclosed amount. 

In a filing, Huanxu said it will finance the deal through a combination of new shares and cash. An AsteelFlash executive confirmed the talks to CIRCUITS ASSEMBLY.

The deal would merge the no. 13 and 27th ranked companies on the CIRCUITS ASSEMBLY Top 50 into an EMS firm with nearly 35 manufacturing sites worldwide and with combined revenues topping $6 billion annually.

If consummated, it would be the largest pure EMS to EMS acquisition since Flex acquired Solectron in 2007.

The acquisition of Financière AFG (FAFG) is not expected to constitute a major asset reorganization, Huanxu said in the filing. FAFG is the holding company of AsteelFlash, and its majority owner.

The companies have not yet signed a formal transaction agreement, and the specific transaction plan is still under discussion, Huanxu said. No closing date has been set, and audits, legal and financial advisory work is pending.

Trading of Huanxu's shares on the Shanghai Stock Exchange has been suspended for up to 10 days pending the issuance of new securities.

Asteelflash had revenue last year of $1 billion, and recorded profits of $70 million to $80 million, according to reports.

FAFG is made up of multiple investor groups, including SPFH Holding Korlatolt, (62% stake), ASDI Assistance Direction (27.6%), Arkéa Capital Investissement (5.25%) and other minority shareholders.

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