Goldman Sachs and China have a lot in common. Both march to their own tune and are accustomed to getting their own way. Both are patient; but neither likes to be kept waiting.
That thought came to mind when the US investment bank said on December 8 that it was moving to acquire a 100% stake in its mainland China securities joint venture, Goldman Sachs Gao Hua (GSGH).
The details of the deal are simple enough.
Goldman will buy the 49% stake it does not already own in the JV it set up in 2004 with Beijing Gao Hua Securities, a domestic brokerage founded by erstwhile investment banking rainmaker Fang Fenglei and investment firm Legend Holdings.
All the New York bank’s onshore operations, including non-investment banking services such as wealth management and securities trading, will then migrate to a new wholly owned entity, to be called Goldman Sachs (China) Securities.
Green light
The deal is not complete: Goldman likely will not receive a green light to buy out its long-time mainland partner until some time in 2021.
But at this point in time, it looks pretty much signed and sealed.
“The process has been initiated with regulators and we have signed a definitive agreement with our joint venture partner to acquire all of the outstanding shares in GSGH that we do not already own,” the bank said in an internal memo seen by Euromoney.
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