The strategic merger will help place CICC in the retail brokering business.
As per two sources with knowledge of the matter at hand, China International Capital Corp is in an advanced acquisition talks with China Investment Securities. The leading Chinese investment bank is trying to strategically place itself in the retail brokerage business.
Earlier today, CICC halted the trading in its shares saying the move precedes a very important announcement of “a very substantial acquisition”.
According to sources, the talks with CICC and China Investment Securities have been underway at least for a couple of months. A formal announcement is due anytime soon.
Sources preferred the cover of anonymity since the discussions are confidential.
21st Century Business Herald, a Chinese newspaper, reported yesterday that “a merger” between CICC and China Investment Securities has been approved by “senior leadership”.
While CICC declined comment, China Investment Securities could not be reached immediately for a comment.
CICC has played a critical role in shaping many large Chinese state-owned enterprises in Hong Kong. It is also a player in mega cross-border merger and acquisition deals when it comes to Chinese companies. However, in the retail stock brokering business, its presence is meager compared to its rivals.
If Shenzhen-based China Investment Securities, which ranked No. 17 by revenue among China stock brokers in 2015, is acquired by CICC, its presence in the retail brokering market will be bolstered.
According to its website, the unlisted China Investment Securities is 100% owned by Central Huijin.