Guotai Junan to merge with Haitong Securities in stock swap

Guotai Junan Securities Co., Ltd. (SSE: 601211) will absorb merge with Haitong Securities Co., Ltd. (SSE: 600837) in a stock swap, creating a leading investment bank. Guotai Junan will issue A-shares and H-shares to Haitong's A-share and H-share shareholders, respectively, at a ratio of 1:0.62. Post-merger, Haitong will be delisted and its legal entity dissolved. Concurrently, Guotai Junan will raise up to RMB 100 billion through a private placement of A-shares to Shanghai State-owned Assets Supervision and Administration Commission. The merger will combine the two firms' client bases, resources, and expertise, aiming to enhance their core competencies and market position. The combined entity will maintain the current business scope of both firms. The deal is subject to regulatory approvals, including from the China Securities Regulatory Commission and the Hong Kong Stock Exchange.