Chinese brokerage CICC announces share swap merger details with Dongxing and Cinda
The three-way merger will create China’s fourth-largest investment bank with assets of US$128 billion
China International Capital Corporation (CICC) has unveiled details of its merger with two smaller state-owned rivals that will create an entity with combined assets of more than 900 billion yuan (US$127.8 billion).
The Beijing-based investment bank will issue some 3.1 billion new A shares at 36.91 yuan to acquire all outstanding shares in Dongxing Securities and Cinda Securities to facilitate the merger, according to a filing to the Hong Kong stock exchange on Wednesday.
Shares of CICC rose 3.7 per cent to 36.18 yuan after trading resumed on Thursday. Trading in the three companies was suspended on November 19 pending the announcement.
The merger would “significantly strengthen support for national strategies and the real economy”, CICC said, adding that the merger also reflected a trend in China’s securities industry where firms were “optimising resource allocation through integration”.
The transaction will create China’s fourth-largest investment bank with assets of about 930 billion yuan, and follows last year’s combination of Guotai Junan Securities and Haitong Securities, which created an industry giant with 1.68 trillion yuan in assets.
The consolidations align with Beijing’s push to build global financial champions.