Open Editor's Digest for free
Rula Khalaf, editor of the Financial Times, selects her favorite stories in this weekly newsletter.
China's Ant Group has made a bid against Citadel Securities to buy Credit Suisse's Chinese securities unit, a move that will test Beijing's appetite to allow the company founded by Jack Ma to expand again after a long-running crackdown.
Ant's bid for Credit Suisse Securities (China) Ltd, which includes investment banking and brokerage services in mainland China, could complicate UBS's plans to dispose of its stake in the unit. The deal would need regulatory approval, and Ant has been in the crosshairs of regulators in recent years.
UBS put the company up for sale after taking control of Credit Suisse when it collapsed last year. It already has a securities unit in mainland China and cannot obtain two licenses.
The Financial Times reported in January that Citadel Securities, the Miami-headquartered market maker founded by billionaire Ken Griffin, had offered about RMB2 billion ($278 million) to buy the unit as part of its plans to expand into China. , last January. Details of Ant's bid are unclear.
No final decision on the deal has been made yet, and any deal would require approval from Founder Securities, the Chinese joint venture partner that holds a 49 percent stake in the Credit Suisse unit, as well as UBS and regulators, the sources said. . UBS holds a 51 percent stake.
UBS, Citadel and Ant declined to comment. The China Securities Regulatory Commission did not immediately respond to requests for comment. Ant's bid was first reported by Bloomberg.
A source familiar with the matter said regulators had previously indicated to Citadel that they were keen to sell the unit to an external bidder, as the license was originally issued to a foreign player.
Bankers hope the sale can be agreed this year, but any delay would risk adding an extra layer of political complexity by bringing the deal closer to the US presidential election in November, when US-China relations are likely to be a major flashpoint. .
Recommended
The bid also highlights Ant's sudden resurgence of interest in gaining a foothold in China's investment banking industry, though several people familiar with the bidding process said Ant's lack of any direct investment banking experience raises questions about its seriousness.
The fintech group tried to take a stake in Tebon, a smaller Chinese brokerage, in 2015. It took over the issuance of most of Ant's securities that were backed by its online loans. However, regulators have not yet approved Ant's application.
Ant's efforts to expand her financial empire have slowed since then. It hit a regulatory crackdown in late 2020 when its $37 billion initial public offering was derailed. It came after Ma, once China's richest person, gave a speech in Shanghai in which he accused China's state-owned banks of a conservative “foreclosure” mentality that prevents small businesses and individuals from accessing credit.
Regulators imposed a $1 billion fine on Ant last year, signaling a phased end to the crackdown. Ant also completed a regulatory process in December that removed Ma's control over the fintech.
