CICC, China Investment Securities Reportedly in Final Talks to Merge

Investment bank China International Capital Corp (CICC) (HKEx: 3908) and the brokerage firm China Investment Securities are in advanced talks on a possible Merger Merger A merger is defined as the absorption of the interest of another. It can include an estate, or contract. There are no specific rules or formats for a union in general. It is a method of combining two or more organizations, business concerns, or other related interests. The terms of a merger are usually by agreement of the parties involved. In the financial sphere, merger refers to an agreement between two or more companies or corporations, public and private, to merge into one entity. Mergers d A merger is defined as the absorption of the interest of another. It can include an estate, or contract. There are no specific rules or formats for a union in general. It is a method of combining two or more organizations, business concerns, or other related interests. The terms of a merger are usually by agreement of the parties involved. In the financial sphere, merger refers to an agreement between two or more companies or corporations, public and private, to merge into one entity. Mergers d Read this Term, people familiar with the matter told Reuters today.

Don’t miss your last chance to sign up for the FM London Summit. Register here!

The trading of government-controlled CICC, formerly led by Levin Zhu, the son of former Chinese premier Zhu Rongji, was halted this morning, involving a very substantial Acquisition Acquisition Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Read this Term of the company.

In terms of profiles, the two companies had $28 billion worth of combined assets at the end of last year and posted a total of nearly $900 million in net income. CICC has 20 branches while China Investment Securities has 160 branches around China.

The Beijing investment bank was formed in 1995 by Morgan Stanley and China Construction Bank Corp as China's first Sino-foreign investment bank. Morgan Stanley sold its stake in December 2010 for nearly US$1 billion.

Complementary Deal

CICC has played a key role in advising the Chinese government on state-owned enterprise reform and guiding the listing of the country’s major overseas IPOs. It has offices in Hong Kong, New York, London and Singapore.

However, the CICC’s retail stock broking business is relatively small which hurts its ability to earn trading commissions from the retail investors who helped fuel the stock market’s dramatic boom last year. That is why the merger could be a good deal for CICC, and in general they do appear complementary, since China Investment Securities focuses on the mass-market client base while CICC’s traditional strength has been in investment banking.

Shenzhen-based China Investment Securities ranked 17th among China’s securities companies by operating income in 2015, while CICC was 23rd with, according to industry association figures.

China Investment Securities is fully owned by Central Huijin Investment, which is a unit of China's sovereign wealth fund and holds stakes in the nation's biggest financial institutions. The company posted 8.5 billion yuan in operating income in 2015.

Beijing-based CICC, which listed in Hong Kong in November, is the oldest investment bank in China and had 94.1 billion yuan of assets at the end of 2015 calendar year, while China Investment Securities had 92.2 billion yuan, according to its websites.