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Caixin Global China Watch
In Depth: Can China Create Its Own Goldman Sachs With Brokerage Mega-Merger?

In Depth: Can China Create Its Own Goldman Sachs With Brokerage Mega-Merger?

Although the Shanghai government is driving the deal, the track record of successful securities firm mergers in China is poor and the two companies face a host of challenges

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Caixin Global
Sep 27, 2024
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Caixin Global China Watch
Caixin Global China Watch
In Depth: Can China Create Its Own Goldman Sachs With Brokerage Mega-Merger?
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As investors await details of the merger of two top Chinese securities firms to form a powerhouse with the potential to compete with global heavyweights, such as Morgan Stanley and Goldman Sachs Group Inc., analysts and academics are debating the merits and risks of a deal that could take over a year to complete.

The marriage between Guotai Junan Securities Co. Ltd. and Haitong Securities Co. Ltd., announced by the two Hong Kong- and Shanghai-listed companies in early September, is being driven by the Shanghai government, which backs both firms.

Falling profitability in the industry fueled by a weak stock market and a slump in IPOs, along with Haitong’s financial and compliance problems and a poor track record of success for brokerage mergers, have prompted some industry analysts to question just how successful joining the two companies will be.

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