Guotai Junan to merge with Haitong Securities in major deal

Guotai Junan Securities Co., Ltd. (SSE:601211) announced plans to merge with Haitong Securities Co., Ltd. (SSE:600837) in a share exchange absorption merger. The deal will see Guotai Junan issue both A-shares and H-shares to Haitong’s shareholders at a ratio of 1:0.62, meaning one Haitong share will be exchanged for 0.62 Guotai Junan shares. The merger will create a securities firm with a combined market capitalization of approximately $50 billion. Concurrently, Guotai Junan will raise up to RMB 100 billion (approximately $13.8 billion USD) in supporting funds through a private placement to Shanghai International Group. The deal has been approved by the boards and shareholders of both companies and is pending regulatory approvals, including from the China Securities Regulatory Commission and the Hong Kong Stock Exchange. The merger is expected to enhance the merged entity’s market position, customer base, and operational efficiency.