New | Investment bank CICC to acquire China Investment Securities for 16.7 billion yuan
Deal marks major strategy change for CICC and to help expand its reach to small retail customers
Investment bank China International Capital Corp (CICC) said on Friday it would acquire China Investment Securities Company (CISC) for 16.7 billion yuan (US$247.2 million).
The purchase marks a major strategy change for CICC, which hitherto has focussed solely on institutional and wealthy clients, unlike other Chinese investment banks.
In a statement, CICC said that the two companies would be able “to achieve considerable synergies in various respects of business expansion,” by applying CICC’s strengths in high-end services to CISC’s customer base and network.
These developments would primarily take place in investment banking, equities, CICC, and investment management, the bank said.
“It’s a good fit strategically,” said Lucas Wang, a Hong Kong-based analyst at First Shanghai Securities. “CICC has been strong with high net worth clients, while China Investment has an extensive reach among small retail customers.”
Beijing-based CICC is purchasing Shenzhen-based China Investment Securities from Central Huijin Investment, a unit of China’s sovereign wealth fund China Investment Corp, which owns about 28.4 per cent of CIC, according to CICC’s website.
CICC is trying to reinvent itself under chief executive officer Bi Mingjian after its ranking as the top Chinese brokerage by revenue in 2005 tumbled to No 23 a decade later. In July, CICC said it was in “very preliminary” discussions with China Investment Securities on “strategic cooperation and business opportunities” and it wasn’t certain that a transaction would proceed.