The two kidnappers, surnamed Tong and Jia, were natives of the city's Nanjiao District and were shot while resisting arrest and attempting to escape, police said.
Police in the city of Datong received a report on Tuesday that chairman of the city's Huayue Group, surnamed Zan, was kidnapped by two armed men who demanded a ransom, state-run Xinhua news agency reported.
More than 500 policemen were dispatched to rescue Zan.
The hostage was rescued, the local police said, adding the two cars, two guns and 31 bullets were also recovered from the scene.