Citic Securities Co (中信證券), China’s largest brokerage by market value, will buy Credit Agricole SA’s Asian CLSA unit for US$1.25 billion.
Citic Securities, based in Beijing, completed its purchase of a 19.9 percent stake in the brokerage for US$310.3 million, the companies said in a statement on Friday. Citic Securities will buy the remaining 80.1 percent in CLSA for US$941.7 million subject to conditions including regulatory approval, the companies said.
Citic Securities and Credit Agricole entered exclusive talks in March over the French bank’s remaining 80.1 percent stake in the Hong Kong-based securities business. CLSA has more than 1,500 employees in 20 locations across 13 countries, according to its Web site.
“This is a symbol of European banks’ retreat,” said Christophe Nijdam, an analyst at AlphaValue in Paris who recommends buying Credit Agricole shares.
Business will remain as usual at CLSA with the existing independent structure of the management team, the statement said. Citic will develop cross-border business through CITICS International, it added.
Founded in 1995, Citic Securities is controlled by the Chinese state-owned Citic Group, which is backed by China’s Cabinet.
Credit Agricole declined 6.4 percent to 3.21 euros in Paris on Friday, giving France’s third-largest bank a market value of about 8 billion euros (US$9.7 billion). The stock has fallen 26 percent this year.
CLSA, founded in 1986, was bookrunner on 150 deals from 2005 to 2010, raising more than US$22 billion, according to its Web site. Credit Agricole’s corporate and investment banking unit owns 65 percent of CLSA, with the broker’s staff owning 35 percent.
Credit Agricole is trimming its balance sheet and cutting costs amid higher capital demands from regulators and a decline in trading and underwriting commissions. It and Citic Securities plan to complete the deal by the middle of next year, they said.