In a move to consolidate China’s $1.7 trillion brokerage sector, state-backed brokerages Guotai Junan Securities and Haitong Securities are merging, creating a powerhouse with $230 billion in assets. This merger, driven by Beijing’s efforts to streamline the industry amid challenging market conditions, is expected to set off a wave of further consolidations.
The deal, subject to regulatory and shareholder approval, will see Shanghai-based Guotai Junan acquire its rival Haitong through a share swap, forming the largest brokerage in China, overtaking Citic Securities. Both companies are controlled by state-run asset managers for the Shanghai government.
The merger is viewed as the beginning of broader consolidation, particularly among state-backed brokerages, as Beijing promotes reforms in the highly competitive brokerage industry, which includes over 140 domestic and foreign firms.
