(Bloomberg) — UBS Group AG is in talks to take full ownership of a Chinese platform by swapping its stake in Credit Suisse’s domestic securities business with a Beijing government investment fund, according to people familiar with the matter. It is said that they are doing so.
Most Read Articles on Bloomberg
The Zurich-based lender is offering to buy the remaining 33% stake in UBS Securities from Beijing State Asset Management Company in exchange for selling its entire 51% stake in Credit Suisse Securities (China). There is. The people said they requested anonymity to discuss personal matters in the transaction.
The latest offer is the latest in a months-long bid for Credit Suisse investment bank in the world's second-largest economy, contested by Ant Group, backed by Chinese billionaire Jack Ma, and Ken Griffin's Citadel Securities LLC. A new twist is being added to the process. For UBS, selling the Credit Suisse venture to Beijing would put it in the way of powerful global companies like Citadel, which are skilled at market making and deal execution, one of the people said. That's what it means.
UBS has put the Credit Suisse venture up for sale after taking control when its smaller Swiss rival collapsed last year. Under Chinese rules, foreign shareholders cannot hold majority shares in two domestic securities companies at the same time. UBS already controls 67% of its UBS securities from 2022 onwards.
UBS had previously sought to raise its stake to 100%, but the Beijing government was reluctant to sell due to the growth and profit prospects of the onshore business, according to people familiar with the matter.
Spokespeople for UBS and Citadel declined to comment. Beijing State Asset Management and the China Securities Regulatory Commission did not respond to requests for comment.
UBS is currently pursuing a dual-track process in which it is in talks with state-owned shareholders for a share swap, while also holding preliminary discussions to sell Credit Suisse to Citadel Securities, people familiar with the matter said. . But there are regulatory hurdles for both suitors, they added.
First, the Chinese government is reluctant to allow state-owned enterprises to take control of foreign securities companies, and may instead give preferential treatment to foreign buyers. That's because the securities license was originally granted to Credit Suisse as part of an effort to open up the financial sector. . It also conflicts with China's longstanding efforts to consolidate its crowded securities industry, the people said.
The worsening U.S.-China tensions do not bode well for Citadel Securities, but President Xi Jinping has softened his stance and sent U.S. business leaders, including Citadel Securities CEO Peng Zhao, to Beijing in late March. I was invited to a small group dinner. This is the second time that Xi has addressed US business leaders, following a November meal on the sidelines of the Asia-Pacific Economic Cooperation meeting in San Francisco, where Citadel Securities was also present. .
Citadel Securities, the only global bidder to Credit Suisse's China platform, has a presence in China with a wide range of businesses spanning asset management, intermediary execution, financial advisory and market making under the securities platform. one of the people said.
UBS is seeking about 2 billion yuan ($278 million) for Credit Suisse's entire China arm, including the stake held by local partners. Citadel Securities submitted a bid of about 1.5 billion to 2 billion yuan in late December, lower than Ant Group's offer, according to people familiar with the matter at the time.
Before Credit Suisse's collapse last year, the Swiss bank had agreed to buy the remaining 49% stake from a Chinese partner for 1.14 billion yuan, valuing the company at about 2.3 billion yuan. It was one of the highest amounts ever allocated to a platform. Country. This agreement became void after the UBS acquisition.
–With assistance from Zhang Dingmin.
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP
