China's Haitong Securities agrees to be bought by Guotai Junan via a share swap (updated)

Guotai Haitong Securities Co

05/09/2024 16:45

(Adds market cap details in paragraph 2, and context in 4-6)
    By Selena  Li
       HONG KONG, Sept 5 (Reuters) - Shanghai-based Haitong
Securities  600837.SS  said it has agreed to be acquired by its
rival Guotai Juan Securities  601211.SS  via a share swap, in
one of the largest mergers in China's securities history. 
    Haitiong, 114.6 billion yuan ($16.16 billion) in market
capitalisation, said late on Thursday it has reached legally
binding cooperation agreement with 130.9 billion yuan Guotai
Junan for the acquisition, according to an exchange filing.
    Guotai Junan plans to issue new shares to shareholders of
Haitong's A-share and H-share investors, a separate Guotai Juan
filing shows. The stocks of the two firms in both markets halt
trading starting on Friday.
    The merger comes after Haitong suffered from quarters of
profit plunges, loss-making international business and scandals
such as a top investment banker fleeing overseas before being
arrested.  
    Its net profit dropped 75% in the first six months of this
year from a year ago, its latest earnings report shows.
    Both Haitong and Guotai Juan are controlled by companies
running state assets for the Shanghai government. 
        
  
($1 = 7.0917 Chinese yuan renminbi)

 (Reporting by Selena Li; editing by David Evans)
 ((Selena.Li@thomsonreuters.com; +852 39525868;))