The transaction is divided into two parts. CITIC Securities paid $3,654,380.03 million to Credit Agricole France to acquire 65,438+09.9% equity of CLSA, which was delivered before the announcement on July 20. CITIC Securities will complete the acquisition of the remaining 80. 1% equity of CLSA at a consideration of 9.465438+0.7 million USD, and the transaction can only be realized after the two parties have completed certain approval procedures.
The new trading structure was determined before April 20 12. CITIC Securities no longer acquired the equity of French Agricultural Credit Bank in Europe, but hoped to become the controlling shareholder of CLSA 100%. In the following three months, the two sides mainly discussed details such as price and transitional arrangements.
Although the consideration of the remaining 80. 1% equity acquisition is lower than the transaction price of the previous part, the market still feels that the acquisition price is on the high side, especially the decline of CLSA 20 1 1 year business data has aggravated the market's worries.
On July 23, the first trading day after the announcement, the A-share price of CITIC Securities fell by 4.06% and the H-share price fell by 7.29%.
A person familiar with the international investment banking business said that in addition to the price factor, the market is more worried that the independence of CLSA analysis and research will be pressured by CITIC Securities, how CITIC Securities will retain the existing staff of CLSA, and the cultural differences between the two investment banks will have an impact on future integration.
After the announcement, CITIC Securities immediately held a conference call for investors. Institutional investors are generally worried about how CITIC Securities will deal with possible employee turnover and listen to CITIC Securities' explanation of the purchase price. Shi Lihong, CEO of CLSA, has also made many contacts with existing customers to understand their opinions and feed them back to the management of CITIC Securities.
With the acquisition of CLSA, the internationalization strategy of CITIC Securities has become very clear. Compared with China's relatively closed single market, other markets such as Asia-Pacific, Europe or the United States are more complicated. How to deal with different regulatory systems and legal environments; How to coordinate the internal resources of the company will be a big challenge for CITIC Securities.
Control Lyon to become rich.
Since CITIC Securities first announced the discussion on CLSA cooperation with Cré dit Agricole in May 20 10, the cooperation framework has changed many times.
The architecture announced on July 20th is quite different from the previous two versions.
CLSA and Fu Sheng Securities are both investment banking platforms of French Agricultural Credit Bank. The former is a leading independent brokerage firm and stock research institution in the Asia-Pacific region, while the latter is a top European securities company, though unknown.
In May, 2065438+00, CITIC Securities plans to establish joint ventures with Lyon in the Mainland, Hong Kong and Europe and America respectively. Later, the plan would lead to the reorganization of the investment banking department of CITIC Securities, and the changes were too grand, and it was finally not implemented.
On 20 1 1 year, CITIC Securities changed its plan, announced the acquisition of shares of CLSA and Fu Sheng Securities, abandoned the cooperation with Credit Suisse Orient in the domestic and American markets, and built a business platform covering Europe and Asia through CLSA and Fu Sheng Securities.
However, during this period, due to the turmoil in the global market and the departure of the CEO of Cré dit Agricole and its shareholders, the already mature cooperation has increased dramatically.
On April 20 12, the two parties decided on a new transaction structure. CITIC Securities no longer buys Fu Sheng Securities, but holds a 0/00% stake in Lyon/KLOC.
According to people close to Credit Agricole, Credit Agricole has been hoping to integrate CLSA and Fu Sheng Securities, but due to the serious obstacles caused by French labor law and supervision system, the integration has not been realized. Cré dit Agricole hopes to achieve this goal by acquiring CITIC Securities.
However, after long-term contact, CITIC Securities found that it was even more impossible to achieve this goal compared with Credit Suisse, so it finally decided to give up the acquisition of the equity of Fu Sheng Securities.
Compared with Fu Sheng Securities, CLSA and CITIC Securities are more complementary in business. CLSA is famous for its independent investment and research capabilities, and has established a global network of more than 9,000 institutional customers in the Hong Kong market.
20 10 citic securities was absent from the overseas underwriting syndicate of agricultural bank of China (60 1288). SH/0 1288。 HK), which made the management of CITIC Securities aware of the urgency of establishing an international sales network. The network resources owned by CLSA just make up for the "short board" of CITIC Securities in developing its international business.
After the transaction structure is determined, negotiating the price becomes the primary task. According to a person close to the negotiation, the remaining 80. 1% shares need to provide a certain premium due to the transfer of control rights. However, due to the European debt crisis and the decline of CLSA's own operating conditions, CITIC Securities has more initiative in price negotiations.
CLSA achieved revenue of 76 10 and 739 million dollars in 20 10 and 201year respectively. The net profit attributable to shareholders of the company was USD 6,654,380+0,000, and the loss was USD 6,543,800+0,000.
For this transaction, which has been negotiated for more than three years, the French Agricultural Credit Bank does not want to delay any longer. People close to Credit Agricole said that in the process of contact with CITIC Securities, the two sides established trust, which also made them tend to know the price as soon as possible.
Consideration analysis
Compared with the acquisition price of CLSA 19.9% equity, the remaining 80. 1% equity price is relatively cheap. However, the total consideration of $6,543.8+25.2 million is still high.
CICC analyst Mao Junhua released a research report saying that the purchase consideration of $654.38+25.2 million is equivalent to 265.438+0 times of the net assets of CLSA 2065.438+00, which is better than the payment price of CLSA 654.38+09.9% equity (equivalent to 2.6 times of CLSA 2065.438+00).
But this price is higher than the P/B ratio of major international investment banks and lower than 1 times. CLSA lost 1 1 USD in 2065438, which made the transaction look more expensive.
An investment banker in Hong Kong said that he did not expect the Lyon Securities News 20 1 1 to lose money. He reminded that CLSA's own license for its US business and Japanese business uses CBI, so the business income and profits in Japan and the US market are merged into CBI's financial report. Lyon's actual income is more than disclosed in its financial report.
An insider of CITIC Securities admits that CITIC hopes to achieve a smooth transition when it takes over CLSA, a large regional investment bank with different cultures, and has paid a high price for it.