CICC to merge with Galaxy Securities creating China’s third largest brokerage: Reuters
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The news: State-owned China International Capital Corp (CICC) will merge with its peer China Galaxy Services, according to sources cited by Reuters.
The numbers: The merger will create China’s third-largest brokerage with 1.4 trillion yuan ($305 billion) in assets. Shanghai-listed shares of CICC and Galaxy both surged by 10% on Wednesday, while the two brokerages' Hong Kong stocks climbed nearly 18% and 20% respectively.
The context: The merger has secured backing from Chinese authorities, and is expected to be announced in the coming weeks.
The merger comes amid a push by Beijing to establish large domestic investment banks to compete with US leaders including Goldman Sachs and Morgan Stanley that have been eking out local market share.
Guotai Junan agreed to acquire its struggling local rival Haitong via a share swap in September last year, forming China’s largest brokerage with USD230 billion in assets. The deal followed a six-strong series of smaller brokerages in the country that have announced mergers since the end of 2023.
The sources: Reuters, South China Morning Post
