Guotai Junan to merge with Haitong in mega deal

Guotai Junan Securities Co., Ltd. plans to merge with Haitong Securities Co., Ltd. through a share swap, creating a leading investment bank. Guotai Junan will issue A-shares and H-shares to Haitong's shareholders at a ratio of 1:0.62, based on the 60-day average trading price prior to the announcement. Concurrently, Guotai Junan will raise up to RMB 100 billion in supporting funds from Shanghai State-owned Assets Operation Co., Ltd. at RMB 15.97 per share. Post-merger, Guotai Junan will increase its total share capital to approximately 17 billion shares and potentially 17.6 billion shares if the supporting funds are fully raised. The deal will significantly expand the surviving entity's scale, increasing total assets by over 74% to RMB 16.2 trillion, compared to Guotai Junan alone. Dissenting shareholders of both companies will have appraisal rights.