UBS picks Chinese state fund over Ken Griffin’s Citadel Securities for Credit Suisse unit
UBS Group has agreed to sell the majority of its stake in Credit Suisse’s China venture to a Beijing-backed fund, dealing a blow to the ambitions of Ken Griffin’s Citadel Securities to expand in the world’s second-largest economy.
Under the deal, which values the money-losing business at US$253.4 million, the Swiss lender will sell a 36.01 per cent holding in Credit Suisse Securities (China) for US$91.4 million to Beijing State-owned Assets Management Co. Founder Securities will dispose of its entire 49 per cent stake in the venture for US$124 million.
That gives the Beijing firm an 85.01 per cent majority stake, according to a statement. UBS will retain 15 per cent after the sale, confirming an earlier report by Bloomberg News.
The announcement brings the months-long rivalry for Credit Suisse’s investment bank in China to an end, in which Citadel Securities had bid for the firm to help it build a local platform for its market-making capabilities.
The sale is a consequence of UBS’s acquisition of its Swiss rival in an emergency rescue last year, which left it with two domestic brokerages in the country.
“We have had a long-standing presence on the mainland for 35 years and we will continue to expand in this important market,” UBS CEO Sergio Ermotti said in the statement.
Before it collapsed last year, Credit Suisse had offered to buy out Founder’s 49 per cent stake, valuing the entire firm at about 2.3 billion yuan (US$334 million).
