CITIC Securities (CITICS), a major Chinese brokerage house, has announced that it will purchase a 19.9% stake in each of French investment bank Crédit Agricole Corporate & Investment Bank's CLSA and CA Cheuvreux broking units for a combined sum of US$374 million.
According to the two firms, the deal, which is awaiting regulatory and unions' representatives approvals, could lead to the combination of Cheuvreux's European and CLSA's Asian equity research and broking businesses to establish a global research-driven agency-only equity house.
“We welcome CITICS as an investor and partner of our project to create an integrated global equity brokerage platform spanning Europe, Asia, and the US with CLSA and Cheuvreux,” said Jean-Paul Chifflet, CEO of Crédit Agricole and chairman of Crédit Agricole Corporate & Investment Bank. “Given the increasing cross-border strategies of our clients, this combination will allow us to consolidate CACIB's equity model and to focus on our key international clients consistently with our medium term plan.”
“We believe that these investments will provide us with a significant opportunity to gain valuable insight in the management of international securities operations, and are consistent with our prudent approach as we seek to build our international business in accordance with our strategy and global aspirations,” added Dongming Wang, chairman of CITICS.
The two firms began discussions in May 2010, with the intention of exploring opportunities to create a global institutional brokerage platform and an Asia-Pacific focused investment bank. A definitive agreement is due to be presented soon, with the deal slated for completion by the end of 2011.