Guotai Junan to merge with Haitong Securities

Guotai Junan Securities Co., Ltd. (SSE: 601211) and Haitong Securities Co., Ltd. (SSE: 600837) have announced a merger agreement. Guotai Junan will absorb Haitong Securities in a share-for-share transaction. The exchange ratio is set at 1 share of Haitong Securities for 0.62 shares of Guotai Junan. Guotai Junan will also raise up to RMB 10 billion in supporting funds from Shanghai State-owned Assets Operation Co., Ltd. Post-merger, Guotai Junan's total assets will increase to approximately RMB 16.2 trillion, and total equity will be approximately RMB 3.4 trillion. The merger will create a leading investment bank with a combined market share exceeding that of their closest competitors. The transaction is subject to regulatory approvals.