Guotai Junan and Haitong Securities, who have been advised by Haiwen & Partners and Grandall Law Firm, are now one step closer to merging after obtaining the SSE’s approval on 9 January.
Once the M&A is completed, it will be the biggest merger to date in the A and H-share markets and the largest listed-brokers’ integration.
Haiwen’s partners Mu Jian, Zheng Yan and Sun Yi have been counselling Guotai Junan, while Grandall’s partners Liu Wei and Song Pingping have been acting for Haitong Securities.
In the final step, the China Securities Regulatory Commission will have to give the green light before the two brokers can merge to become China’s largest securities firm, overtaking CITIC Securities.
Guotai Junan plans to absorb Haitong Securities through a share swap deal. Each Haitong Securities A share can be exchanged for 0.62 Guotai Junan’s A shares, the same ratio applies to exchanging H shares.
Guotai Junan will also raise up to RMB10 billion by issuing A shares to Shanghai State-owned Assets Management. On completion, Haitong Securities will be delisted from both the HKEX and SSE.
With assets of RMB931.9 billion and RMB693.2 billion respectively, Guotai Junan and Haitong Securities will integrate their digital tech resources through the merger to enhance their cross-border financial services, according to a document on SSE website.
This alliance aligns with calls from China’s top-level financial conference — the Central Financial Work Conference — held on October 2023 that the country should accelerate growth to become a nation with a strong financial sector.
China has been witnessing several large-scale brokerage mergers, Guolian Securities and Minsheng Securities have sealed their deals by receiving approval from the China Securities Regulatory Commission last month.
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