Guotai Junan to merge with Haitong Securities in landmark deal

Guotai Junan Securities Co., Ltd. plans to absorb and merge with Haitong Securities Co., Ltd. through a share swap. The merger will involve Guotai Junan issuing A-shares and H-shares to Haitong Securities' shareholders, listed on the Shanghai and Hong Kong Stock Exchanges, respectively. The deal also includes raising supporting funds of up to RMB 100 billion by issuing A-shares to Shanghai State-owned Assets Operation Co., Ltd. Post-merger, the surviving company will retain Guotai Junan's controlling shareholder and actual controller, with no change in control. The merger will create a securities firm with significantly increased assets, reaching approximately RMB 16.22 trillion, a 74.09% increase compared to Guotai Junan's pre-merger figures. The transaction represents a significant consolidation in China's securities market, aiming to create a leading investment bank.