China Cinda announces major stake in CICC via complex merger

China Cinda Asset Management Co., Ltd. has announced proposed mergers by absorption involving its non-wholly-owned subsidiary Cinda Securities, and Dongxing Securities, with CICC as the surviving entity. The company currently owns 2,551,400,000 Cinda Securities A Shares, representing approximately 78.67% equity interest in Cinda Securities.

Upon closing, China Cinda will cease to own Cinda Securities A Shares and will receive 1,323,666,320 CICC A Shares, representing approximately 16.71% equity interest in CICC on an enlarged shareholding basis. This transaction is structured as a share-for-share exchange.

The Cinda Securities Exchange Ratio is 0.5188 CICC A Shares for every Cinda Securities A Share, while the Dongxing Exchange Ratio is 0.4373 CICC A Shares for every Dongxing A Share. This will result in a one-time after-tax gain of approximately RMB20bn for China Cinda, excluding tax exemptions and related policies. The proposed mergers constitute a very substantial disposal and a very substantial acquisition for the company under Hong Kong Listing Rules, requiring shareholder approval.

The proposed mergers are subject to various conditions, including approvals from shareholders of CICC, Dongxing, Cinda Securities, China Orient, and China Cinda, as well as requisite regulatory approvals in the PRC and confirmation from the Hong Kong Stock Exchange. The relevant circular and EGM notice are expected to be dispatched by March 31, 2026.