Talk about timing. In October 2007 chairman Wang Dongming signed a memorandum of understanding for Citic Securities Co. to invest up to $1 billion for a 6 percent stake in Bear Stearns Cos. Fortunately for Wang, the two sides were unable to iron out details of the deal before March 2008, when Bear Stearns collapsed and was acquired in a fire sale by JPMorgan Chase. Citic saved a bundle of cash, but it was left without a Wall Street partner.
Wang hasn’t given up on his ambition of building Citic into a worldwide powerhouse, though. In March 2009 he formed an advisory and investment venture with Evercore Partners, the investment bank founded by former U.S. deputy Treasury secretary Roger Altman, to seek out more mergers and acquisitions work in China and abroad.
Last month, Wang announced an agreement in principle with Paris-based Crédit Agricole Corporate & Investment Bank to form securities joint ventures that promise to create an equities platform with global reach. Such an agreement, if consummated, would combine Citic’s strengths in China, where it is the most diversified financial conglomerate and boasts 1.9 trillion yuan ($280 billion) in assets, with Crédit Agricole’s franchise in Asian and European equities. The French bank’s CLSA unit ranked sixth in II’s 2010 All-Asia Research Team.
The two sides haven’t set atarget date for forming any ventures, and it’s not clear whether this initiative will fulfill Wang’s ambition of making Citic a global player, but analysts say it holds significant potential. “This type of joint venture could strengthen Crédit Agricole’s H-shares offering and help Citic Securities in its strategic entry into global markets,” says Yuan Wenli, a Hong Kong–based analyst with research firm Celent.
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