China International Capital Corp (CICC) plans to acquire smaller rivals Dongxing Securities and Cinda Securities via a share-swap deal to strengthen its business, China’s sixth-biggest investment bank by revenue said on Wednesday.
The planned merger comes as Beijing encourages consolidation in China’s $1.6 trillion securities industry to foster large and globally competitive investment banks.
“This restructuring will accelerate growth into a world-class investment bank, and support China’s financial market reforms and high-quality growth of the securities industry,” state-owned CICC 3908.HK601881.SS said in a statement.
The merger will also help cut costs through integration and improve shareholder returns, the bank said.
CICC plans to issue China-listed A shares to Dongxing 601198.SS and Cinda 601059.SS shareholders in a share swap.
The three companies said in separate filings that trading of their A shares will halt from November 20 pending the plan. Trading in CICC’s Hong Kong-listed shares will also be suspended.
Reuters
