Takeover to create research force of 250 analysts in two dozen cities
Citic Securities, China’s largest brokerage, will take over CLSA Asia Pacific Markets for $1.25 bn as the Chinese company strengthens its presence in the region.
The takeover announcement comes as Citic finished its purchase of a 19.9 percent stake in CLSA for $310 mn, according to a company statement. The remainder of CLSA – an 80.1 percent stake – will change hands for $941.7 mn next year, under the agreement signed July 20.
The takeover will give the 17-year-old China-focused brokerage a well-established presence throughout Asia, and create a research team of more than 250 analysts covering more than 1,000 companies, 13 countries and various industries, sub-sectors and specialties in the region from at least two dozen cities.
It was not immediately clear how the companies may overlap in research or whether the entity to be formed by the takeover will alter its analysis focus in any areas. However, the agreement states that CLSA will keep the independent structure of its current management team.
CLSA, currently majority owned by Crédit Agricole of France, has more than 1,500 employees, mostly working out of 20 cities in the Asia-Pacific region, according to the company’s website.
The company, which employs more than 150 analysts, calls itself ‘Asia’s leading and longest-running independent brokerage and investment group’.
CLSA analysts compile more than 50 research products a year, including country reports, the acclaimed weekly Greed & Fear newsletter on equity strategy by Christopher Wood, company and industry research, economics coverage including strategist Andy Rothman’s weekly Sinology report, and more.
The 26-year-old company identifies its 13 key markets as Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand and US.
Citic, which posted a profit of RMB 12.6 bn last year, according to its website, is controlled by the Chinese state through Citic Group and focuses mainly on the Chinese market, including petrochemicals, macroeconomics, construction, banking and other sectors.
Citic has some 100 analysts based in Beijing, Shanghai, Shenzhen and Hong Kong in what the company calls ‘the strongest analyst team in China’.
Citic says ‘its research ranking is among the top two of the market in all of the most important fields’ and it ‘will continue to build up the brand of excellence’.
Crédit Agricole has been negotiating the sale of its Hong Kong based CLSA since May as the French bank has focused on supporting its share price and ridding itself of non-core assets to better deal with the euro zone crisis back home.
Banks from Japan, Singapore, South Korea and elsewhere in Asia are also reportedly considering buying assets from troubled European banks operating in the region.
