China’s largest brokerage formed by Guotai Junan and Haitong’s US$14.5 billion merger

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Haitong’s shareholders will be able to swap their shares for Guotai Junan stock or receive cash in lieu

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Guotai Junan Securities and Haitong Securities announced the details of their merger plan on Friday. Photo: Shutterstock

Zhang Shidongin Shanghai

Published: 3:57pm, 22 Nov 2024Updated: 4:13pm, 22 Nov 2024

Guotai Junan Securities and Haitong Securities have laid out details of their 103 billion yuan (US$14.5 billion) merger plan that will create China’s biggest brokerage.

Haitong’s shareholders will be able to exchange shares for Guotai Junan stock or receive cash offered by the acquirer, the two brokerages said in a joint exchange statement on Friday.

After the merger, which was announced in September, Haitong will cease to exist and Guotai Junan will sell new shares to fund business expansion, the statement said. The deal received the go-ahead from Shanghai’s state-owned asset regulator, which ultimately controls the two companies, but is still pending shareholders’ approval.

China’s brokerage industry has ushered in a wave of government-led mergers and acquisitions this year after Beijing said it wants to create home-grown investment banks that can compete on the global stage. The Haitong-Guotai Junan deal is the biggest so far, creating an entity that will have combined assets of 330 billion yuan and rank first in the industry.

Haitong Securities had assets totalling 693.2 billion yuan and 297 branches across China as of September. Photo: Imaginechina via AFP

“The merger is an alliance of two big companies and will complement their advantages,” the statement said. “It will accelerate the pace of building an investment bank with industry leadership and global competitiveness, giving new vitality to the innovation in the capital market and the brokerage industry.”