Guotai Junan Securities

History

2024: Merging with Haitong Securities into one state-owned company with $230 billion in assets

On September 5, 2024, Haitong Securities and Guotai Junan Securities - two of China's largest state-owned brokerages - announced the merger. As a result, a structure was formed with assets in the amount of $230 billion.

The merger is carried out by exchanging shares. The deal, as noted, will be an important step towards the implementation of China's large-scale program to create an aircraft carrier-sized brokerage that can compete with Wall Street banks. The merger comes amid a slowdown in the Chinese economy and weak stock market dynamics, it said.

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Фото: Bloomberg

As of the beginning of September 2024, Guotai Junan Securities has about 15 thousand employees, while Haitong Securities employs more than 13.6 thousand people, including 1645 specialists in investment banking. As part of the agreement, Guotai Junan Securities will issue shares for listing on the Shanghai Stock Exchange to Class A holders of Haitong securities and will do the same in Hong Kong with Class H shares.

This marks the beginning of industry-wide consolidation, which will lead to more mergers between large brokerage companies, says Huang Yang, fund manager at Shanghai QiuYang Capital Co.

Beijing's push to create large competitive investment structures comes years after a number of global banks, including Goldman Sachs and Morgan Stanley, took control of Chinese businesses. According to Morgan Stanley analysts, the merger of Haitong Securities and Guotai Junan Securities could "send a positive signal to the market," which is important given that "complex capital markets cycles and tighter regulation have led to a sharp decline in some broker income items in 2023 and the first half of 2024."^[1]

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