China investment completes CLSA takeover

CITIC Securities has taken 100 percent control of CLSA, the Asia-based brokerage and investment manager with a real estate arm for a total of $842 million.

CITIC Securities, the $14 billion Chinese investment bank, has completed its purchase flagged last year of Asia-focused brokerage and investment firm CLSA.

CITIC said it had bought the remaining 80.1 percent that it did not already own for $842 million, according to a joint statement.

The seller is the €1.7 trillion French retail banking group Crédit Agricole CIB, of which CLSA has been a subsidiary since 2003. 

Completion of the takeover follows an announcement last July that CITIC Securities and Crédit Agricole has purchased a 19.9 percent stake in CLSA for $310 million as a “first phase,” of the transaction. 

CLSA, which has more than $1.2 billion of real estate funds and assets, will now operate as a wholly-owned subsidiary of CITIC Securities, in order to “spearhead its global, ex-China, sell side agency businesses”. CITIC will be appointing another of its officers to CLSA's board at the next board meeting, but “vow[ed] to maintain the independent perspectives of CLSA’s research and its vibrant culture through safeguarding the autonomy of CLSA’s daily operations.”

The original purchase price was supposed to total $1.25 billion, and the remaining 80.1 percent of CLSA was valued at $942 million last year.  However, “due to a change in the scope of assets and businesses in CLSA,” that purchase price was reduced to $842 million, the parties said in a statement.

The current purchase does not include CLSA’s Taiwan business due to regulatory restrictions. CLSA Taiwan will continue to operate as a subsidiary of Crédit Agricole, though it is understood that CITIC Securities could seek to purchase it at a later date if regulations become more favorable. The statement insisted, however, that “the exclusion of CLSA’s Taiwan business from the acquisition would not have any undue impact on the overall businesses and operations of CLSA.”

Via the deal, CITIC Securities has added offices in 11 countries to its 196 outlets, which are primarily in China or Hong Kong. 

A spokeswoman for CLSA declined to comment on the specific impact the deal would have on CLSA’s real estate business, saying it is was early for additional comment. 

However, now that the transaction has been inked she added CLSA Capital Markets would be “discussing in more detail areas of potential cooperation between Capital Partners and the private equity arm of CITIC Securities”.

“We believe that the acquisition will only strengthen the position of both CLSA and Capital Partners, will provide enhanced access to the China market and in particular a broader deal pipeline for Capital Partners. It will also provide an additional source of capital and financial strength to both CLSA and Capital Partners,” she told PERE.