CICC to Create $140 Billion Chinese Brokerage by Absorbing Two Rivals
China International Capital Corp (CICC) plans to absorb two smaller brokerages to create a new investment banking giant worth $140 billion in assets. The deal will make CICC China's fourth-largest investment bank behind CITIC Securities and Guotai Haitong Securities.
China International Capital Corp announced plans to absorb two smaller rival brokerages in a deal that will create a financial giant with over 1 trillion yuan ($140 billion) in assets.
The merger is part of a state-led push to consolidate China's financial sector. Beijing wants to create bigger, more competitive investment banks that can rival major Wall Street firms in global markets.
Once complete, the new entity will become China's fourth-largest investment banking company. Only CITIC Securities and Guotai Haitong Securities will remain larger in the Chinese market.
Shares of Chinese brokerage firms climbed on news of the deal as investors bet on more consolidation ahead. The merger fits Beijing's broader goal of creating national champions in key industries including finance.
CICC currently provides securities trading, investment banking, asset management, and margin trading services to clients across China and internationally.
This massive merger shows Beijing is pushing Chinese financial companies to get bigger and stronger to compete globally. Larger investment banks can offer more services and better compete with Wall Street firms for deals and trading.
Watch for regulatory approval of the merger and potential additional consolidation deals among Chinese brokerages.
Was this article helpful?
0 people found this helpful