Guotai Junan Securities, Haitong Securities merger approved

The Shanghai municipal government has approved the merger and restructuring of Guotai Junan Securities and Haitong Securities, according to a document released on the government's official website late Tuesday.

Furthermore, the municipal State-owned assets supervision and administration commission will guide the two firms to conduct equity transactions according to related laws, help them to complete the registration of name changes and facilitate business integration and optimization, the municipal government said in the document.

Inferred from the 2023 data collected from the public domain, the combined assets of the two securities brokerages stood at 1.68 trillion yuan ($230 billion) while their net assets attributable to the parent companies totaled 330 billion yuan. CITIC Securities, China's largest securities firm, saw its asset value exceeding 1.45 trillion yuan at the end of 2023.

China Securities Regulatory Commission, the country's top securities watchdog, said in a guideline released in March that efforts will be made to nurture about 10 leading securities firms to facilitate high-quality development within the industry. Leading securities firms are encouraged to engage in mergers, acquisitions and restructuring in order to strengthen their business and enhance their services, according to the guideline.

The CSRC said in another guideline released in September that listed securities firms are supported to conduct M&A and restructuring to improve their core competitiveness and grow into first-rate investment banks at a faster pace.

Restructuring within the securities industry has accelerated this year. At least seven such cases reported by 14 securities firms have been disclosed so far, including a merger between Ping An and Founder Securities which was confirmed in March and the Guolian Securities' acquisition of Minsheng Securities announced in May.