Business Essentials for Professionals


Ant Group Beats Citadel To Acquire Credit Suisse's China Division: Report

Ant Group Beats Citadel To Acquire Credit Suisse's China Division: Report
According to a Bloomberg News story, the Chinese company Ant Group, a fintech behemoth, has outbid billionaire Ken Griffin's Citadel Securities for Credit Suisse's investment bank venture in China. However, it is uncertain if Ant Group's offer would be accepted.
Beijing prefers a foreign buyer, according to the article, which cited people familiar with the subject. As a result, Ant Group, a unit of Alibaba Group, which wants to establish a securities business in China utilising Credit Suisse's activities, would have its bid thoroughly reviewed.
The report also stated that seller UBS, which is now in ownership of Credit Suisse, will now have to decide between the lesser Citadel bid, which was lodged in December and offers between 1.5 billion and 2 billion yuan ($208.47 million) and is more likely to receive government permission, and the larger local bid from Ant.
There were no comments on the issue from the Ant Group.
In order to guarantee that its financial-related operations are properly regulated, the fintech behemoth has been transforming itself into a financial holding company with the assistance of Chinese regulators.
There were no comments from UBS and Citadel.
The competition for Credit Suisse's China securities business is taking place as the second-largest economy in the world slows down, and the local A-share market is fighting against a flight of foreign capital and increased regulation of IPOs.
The largest bank merger since the global financial crisis of 2008, UBS's acquisition of Credit Suisse, was hurriedly orchestrated by Swiss regulators last year to prevent Credit Suisse from collapsing.
After the merger, UBS now owns a majority stake in two securities companies in China, a country where businesses are only allowed to run one.
In the middle of last year, the Swiss bank started looking for purchasers. International financial institutions that are interested in making a bid included Citigroup which is looking to gain traction in China's domestic securities market.
The chief executive of Citadel Securities, Peng Zhao, in November had said that the largest market maker in the United States was "actively exploring" opening a licenced onshore company in China.
Credit Suisse Securities China, the company up for sale, was formerly divided 49% by Founder Securities and 51% by Credit Suisse.
Prior to the UBS merger, the founder consented to be bought out by Credit Suisse for 1.14 billion yuan, which put the company's valuation at roughly 2.3 billion yuan. The agreement has not yet received Chinese regulatory approval.
This month, according to Reuters, UBS planned to reduce staff in the upcoming months as the bank's number of bankers specialising in China increased following its acquisition of Credit Suisse.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc