China is combining two of its largest state-backed brokerages to create a new giant as it seeks to consolidate the $1.7 trillion sector and build stronger investment banks to compete with foreign financial firms.
Guotai Junan Securities will merge with smaller rival Haitong Securities in a share swap, according to statements from both companies on Thursday. The combination of the firms, both partly owned by Shanghai’s state-owned asset manager, will create a new entity with assets of 1.6 trillion yuan ($230 billion), surpassing Citic Securities as the largest brokerage.
The merger still needs to be approved by the boards of directors and shareholders of both companies, as well as by regulators.
