Guotai Junan to merge with Haitong Securities in mega deal

Guotai Junan Securities (SSE: 601211) will absorb and merge with Haitong Securities (SSE: 600837) in a massive deal involving a share exchange and the raising of supporting funds. 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 through a private placement to Shanghai State-owned Assets Operation Co., Ltd. The merger will create a securities firm with a combined market capitalization of over RMB 16 trillion and total assets exceeding RMB 16.2 trillion. Following the merger, Haitong Securities will be delisted and cease to exist. The deal is subject to regulatory approvals.