China’s Soochow Securities said on Tuesday it plans to buy a controlling stake in smaller rival Donghai Securities for 11.5 billion yuan ($1.7 billion), as Beijing encourages consolidation in the country’s crowded brokerage industry.
Soochow Securities said in an exchange filing that it plans to buy an 83.7% stake in Donghai.
The purchase would be funded by newly issued shares and cash.
The acquisition will improve Soochow Securities’ competitiveness, the brokerage said.
The deal, which still requires shareholder and regulatory approval, would boost the brokerage’s total assets by 31%, according to Soochow Securities.
Beijing has been encouraging consolidation in a brokerage industry crowded with more than 140 players, seeking to build globally competitive companies.
In April, Orient Securities said it would acquire unlisted rival Shanghai Securities. Last year, Guotai Junan acquired Haitong Securities, creating China’s largest brokerage by assets at the time. ($1 = 6.7624 Chinese yuan renminbi)
Reuters
