Hong Kong Exchanges and Clearing Ltd (HKEX), a stock exchange operator, announced on Wednesday that it is acquiring a majority stakeholder position in Shenzhen Ronghui Tongjin Technology (SRTT).
A provider of Exchange and regulatory technology, SRTT is a subsidiary of Shenzhen Kingdom Sci-Tech (SKST). A gigantic company, SKST employs 6,000 people and provides an array of technological services and products to the financial services industry.
HKEX has signed a letter of intent that, assuming all of the details are carried to fruition, will see that exchange operator taking a 51 percent stake in SRTT.
SKST currently has a 60 percent stake in the firm, and that figure will fall to 29.4 percent if the deal is completed. SRTT employees, who currently have a 40 percent stake in the firm, will see their share in the company fall to 19.6 percent.
Done deal by Q2
If the two parties can finalize all of the details of the acquisition, then it should be completed in the second quarter of this year.
According to a statement released by HKEX, the acquisition is being carried out in order to improve the exchange operator's technological capabilities. The deal should also reduce HKEX's reliance on third-party vendors.
“The global capital markets are being propelled forward by technological developments, and we are very pleased to have signed a letter of intent today with Ronghui Tongjin,” said HKEX Chief Executive Charles Li. “As committed technology partners, together we will seek to further enhance our existing capabilities, expand our reach and create growth opportunities.”
Currently, SRTT has approximately 200 employees. Based in Shenzhen, a city in mainland China that borders Hong Kong, the company should be able to support HKEX by reducing development costs and integrating new technologies into the exchange operator's systems.
