The merger of two CITICS, the largest shareholder of Beijing Financial Holding Group and CITIC Construction Investment Co., Ltd., failed

category:Finance
 The merger of two CITICS, the largest shareholder of Beijing Financial Holding Group and CITIC Construction Investment Co., Ltd., failed


This is to implement the responsibility subject, set up asset management companies under the local SASAC, and transfer the asset management functions originally subordinate to the SASAC state owned assets management center to a specific holding enterprise. This can effectively separate government from enterprise. In fact, the transfer of shares was carried out in March. Therefore, the change of major shareholders should be a normal process. Pan Helin, executive director of the Digital Economy Research Institute of Central South University of Finance and law, told Time Finance on October 23.

On October 23, time finance reporter contacted CSCI on relevant issues, but no reply was received as of the time of publication.

CITIC welcomes major shareholders

Beijing financial holding is an enterprise, and the Beijing state-owned capital operation and management center is the agency holding the equity of SASAC. One of the general principles of SOE reform is the separation of government from enterprise. In particular, this kind of enterprises in competitive industries with certain control rights. The main way to isolate government and enterprises is to carry out market-oriented management in the way of asset management companies. Pan and Lin said to the times finance and economics.

With the orderly promotion of the business layout and development of Beijing Financial Holding Group, Beijing Financial Holding Group will cooperate with various advantageous financial resources in the future, promote the unified use of data connectivity, customer resource management and risk prevention and control among shareholding financial institutions, promote cross innovation of financial business, and give full play to the comprehensive service function of large financial institutions.

At the same time, Beijing Financial Holding Group will enhance the ability of financial services to the real economy, build a new competitive advantage of Beijings financial industry, help the capitals financial system reform, expand the opening up of the financial industry and the high-quality development of modern financial industry, so as to provide better financial service guarantee for the economic and social development of the capital.

The background of the acquisition is that Chinas financial regulatory structure is undergoing profound changes. On September 13, the official website of the State Council released the decision on the implementation of access management of financial holding companies (hereinafter referred to as the access decision) and the Trial Measures for the supervision and management of financial holding companies (hereinafter referred to as the financial control measures) on the official website of the State Council, bringing the financial holding companies into the scope of open and transparent supervision.

There are at least two or more financial institutions under the control of financial holding companies. Driven by market factors, business cooperation among institutions is inevitable. One of the core objectives of the implementation of financial control access measures is to establish a risk isolation mechanism to isolate the industrial sector from the financial sector, which is conducive to the sustainable and healthy development of financial holding companies and prevent cross infection of risks. Yu Baicheng, President of the zero one research institute, told time finance.

In the financial market, financial holding companies are also known as the last vacuum zone under the attitude of bringing all financial businesses under supervision. The financial holding company has many financial licenses, various business types, complex equity structure and high risk of related party transactions. Moreover, financial companies are often large-scale, involving a wide range of risks, and the impact is also cross and chain. In particular, financial holding groups formed by non-financial enterprises, such as tomorrow department and HNA department, all have such characteristics. Yu Baicheng said.

According to the plan, the financial control supervision measures issued this time will be implemented from November 1, 2020. Eligible financial holding companies can apply for licenses, and the central bank will give an official reply within six months. If everything goes well, the financial holding company will be officially approved in the first half of next year. Subsequently, the central bank will further formulate the implementation rules for the supervision and management of financial holding companies and their business activities, and the measures will also give a 12-month transitional period.

Next, we can see that those financial holding companies that do not meet the requirements will be subject to equity integration, business divestiture and rectification until they meet the standards and obtain permits. Some financial holding companies that are difficult to continue to operate and seriously endanger the financial order will withdraw according to law. Yu Baicheng said.

The merger of CITIC and CITIC is completely cool

In April this year, it was reported that CITIC Group, the parent company of CITIC Securities, would purchase the shares of CSCI from Central Huijin and become its largest shareholder. Relevant details are still being finalized, but both CITIC Securities and CSCI have agreed to the merger plan. Since then, CSCI and CITIC Securities both announced that the company has no information that should be disclosed but not disclosed.

There are still a lot of concerns about merger, but in fact, it is unlikely to merge. In fact, China CITIC Securities was Huaxia Securities. In 2004, CITIC Securities and China Construction Investment acquired Huaxia Securities due to the depression of the securities industry. Later, the regulatory authorities required an enterprise to control only one securities company. Therefore, CITIC Securities sold its shares to reduce its shareholding weight. Now, CITIC Securities only holds 5% of the shares, while Huijin and Beijing Financial Holding are the major shareholders u3002u201d Pan He Lin Xiangs financial analysis of the times.

According to public information, in 2005, CITIC Securities and China Construction Bank jointly acquired Huaxia Securities, which was in a difficult operation, and was renamed as China construction investment. The former held 60% of the shares. Later, under the effect of the one participation and one control policy, at the end of 2010, CITIC Securities transferred most of its shares to Beijing State Administration Center, and China Construction Bank transferred its shares to Central Huijin.

In 2008, CSCI and CITIC Group signed the trademark use license contract for the first time, with a valid period of two years. Since 2010, the two parties have renewed the use of trademarks for four times. The license period of each renewal contract is 3 years. The latest trademark use contract was signed in 2019 with a validity period of two years, and it will be terminated in April 2021.

Although the name of CSCI has been preserved, now if CITIC Securities wants to merge with CSCI again, it needs to acquire state-owned shares. As two separate listed entities and become public companies, the difficulty of this kind of merger can be imagined. Pan and Lin said.

In fact, even without the change of major shareholders of CSCI, the possibility of successful acquisition of CSCI by CITIC Securities is not optimistic by market analysts. At present, CITIC Securities and China CITIC construction investment are in good condition. Both of them are listed companies with a market value of more than 320 billion yuan. They are among the top two securities companies. Who is willing to commit to others? Is it meaningful to set up a large head securities company? This is also a problem. Pan and Lin said. According to the latest closing price calculation, CITIC Securities and China CITIC construction investment securities are the two securities companies with the highest market value, with a total market value of 356 billion yuan and 300.7 billion yuan respectively. If combined, the total market value will reach 656.7 billion yuan, becoming the far leading giant Mac of domestic securities companies. Now, with the completion of the change of major shareholders of China CITIC, everything has settled down, and the merger of two CITICS has completely ceased. Article source: time finance editor: Jia Honghui extended reading to reveal the real estate market plus leverage nuclear weapons: zero down payment can be achieved for the second set of housing? Textile and clothing single explosion but no profit: spinning a ton of yarn loss 1000 moderate aging! During the 14th five year plan period, the elderly will break 300 million. Source: editor in charge of time finance and Economics: Zhong Qiming_ NF5619

Is it meaningful to set up a large head securities company? This is also a problem. Pan and Lin said.

According to the latest closing price calculation, CITIC Securities and China CITIC construction investment securities are the two securities companies with the highest market value, with a total market value of 356 billion yuan and 300.7 billion yuan respectively. If combined, the total market value will reach 656.7 billion yuan, becoming the far leading giant Mac of domestic securities companies.

Now, with the completion of the change of major shareholders of China CITIC, everything has settled down, and the merger of two CITICS has completely ceased.

Source: time finance editor: Jia Honghui