Malaysian bank CIMB Group Holdings Berhad (CIMB), and China Galaxy Securities Co Ltd, have completed their co-ownership deal in CIMB Securities International Pte Ltd (CSI), the holding company of CIMB’s ex-Malaysia stockbroking business.
Both companies through their wholly-owned subsidiaries CIMB Group Sdn Bhd, and China Galaxy International Financial Holdings Limited (CGI), closed a share purchase agreement making them 50:50 shareholders in CSI.
Among CSI’s stockbroking activities involve institutional and retail brokerage, equities research, and associated securities businesses across Indonesia, Singapore, Thailand, Hong Kong, South Korea, India, UK, including the US.
CIMB’s group chief executive Tengku Dato’ Sri Zafrul Aziz, and China Galaxy Securities deputy chairman and executive Gu Weiguo, signed the deal in Beijing on Tuesday (June 6), where the Chinese firm bought CGI’s 50 per cent stake in CSI for up to $121 million (SGD167 million or RM515.0 million).
Price of the acquisition was based on a multiple of 1.3 times of CSI’s consolidated net asset value of SGD256.9 million in December 31, 2015.
CIMB is a leading ASEAN universal bank, while China Galaxy Securities is one of the largest Chinese securities companies.
The joint venture is expected to occupy a wider country agenda, being poised to further capitalise on China-outbound M&As, China-ASEAN cross-border investments and infrastructure funding. China’s Belt and Road initiative was noted to facilitate growth, consumption and capital flows into the region.
“CIMB’s stockbroking business will effectively be re-positioned as a pure play broker with the client base of a universal ASEAN bank,” Zafrul said. “We will continue to offer the full suite of investment banking and capital markets services to our clients, supplemented by the extensive equities distribution platform and research coverage of the joint venture.”
Following the signing of the ex-Malaysia share purchase agreement, the parties will work towards obtaining the necessary regulatory approvals with a target to complete by the fourth quarter of 2017.
The parties are also in discussions with respect to the Malaysia stockbroking business.