China International Capital Corporation (CICC) has announced the details of its merger with two smaller state-owned rivals, Dongxing Securities and Cinda Securities, creating a new entity with combined assets exceeding 900 billion yuan (US$127.8 billion). The Beijing-based investment bank will issue 3.1 billion new A shares at 36.91 yuan to acquire all outstanding shares in the two firms, as per a filing to the Hong Kong stock exchange.
Following the announcement, shares of CICC surged by 3.7 per cent to 36.18 yuan upon trading resumption. The trading of the three companies had been suspended on November 19 in anticipation of the merger. The move is expected to significantly strengthen support for national strategies and the real economy, according to CICC, reflecting a broader trend in China’s securities industry of optimizing resource allocation through integration.
The merger will establish China’s fourth-largest investment bank, with assets totaling around 930 billion yuan. This development comes on the heels of the amalgamation of Guotai Junan Securities and Haitong Securities last year, which resulted in the formation of an industry giant with assets amounting to 1.68 trillion yuan. These consolidations align with Beijing’s objective of fostering global financial champions.
In a recent address to the Securities Association of China, Wu Qing, the chairman of the China Securities Regulatory Commission, emphasized the need for brokerages to redouble efforts in line with Beijing’s vision of positioning China as a global financial powerhouse while supporting the country’s technology self-reliance strategy.
Under the agreement, each Dongxing A-share will be converted into 0.4373 CICC shares, while each Cinda share will be exchanged for 0.5188 CICC shares. Notably, CICC, Dongxing, and Cinda are all controlled by Central Huijin Investment, a unit of China’s sovereign wealth fund. Cinda shareholders will receive 19.15 yuan per share, matching the 20-day average price, with no premium involved, while Dongxing shareholders are offered a 26 per cent premium above the 20-day average price before the merger announcement.
Qualified dissenting shareholders of CICC have the option to sell their A shares at 34.80 yuan each and H shares at HK$18.86 each. Similarly, Dongxing’s dissenting shareholders can sell at 13.13 yuan per share, whereas Cinda’s dissenting shareholders have a put option at 17.79 yuan per share.
Upon the completion of the merger, Central Huijin’s stake in CICC will decrease from 40.11 per cent to 24.44 per cent. The entity has committed not to sell CICC shares for a period of 36 months post-merger completion. Established in 1995 as a joint venture between China Construction Bank and Morgan Stanley, CICC operates more than 200 branches and offices globally, providing a diverse range of financial services.
The firm went public in Hong Kong in November 2015, followed by a listing in Shanghai in November 2020. With its extensive network spanning mainland China, Hong Kong, New York, London, Singapore, Frankfurt, Tokyo, Dubai, and other locations, CICC continues to play a pivotal role in the financial landscape.
This article originally appeared in the South China Morning Post (SCMP), a trusted source for reporting on China and Asia for over a century. For more SCMP stories, explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
