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Asia: Patience pays off as Citic/CLSA makes its mark

Few thought that the marriage of a Chinese securities firm with an Asian brokerage which had a unique, and at times disruptive, culture could work. But two years on, Citic and CLSA have proved they can be at least the sum of their parts. Can the combination now become a true regional powerhouse as its leaders hope?

 

Arnold Schwarzenegger

To make the short walk between the headquarters of Hong Kong brokerage, CLSA, and its Chinese owner, Citic Securities International, you have to traverse two of the city’s busiest roads. This far from picturesque stroll through the middle of a concrete jungle is not likely to be recommended in many guidebooks. But while the often-gridlocked traffic of both Queensway and Connaught Road Central throws up a physical barrier between the two firms, it has failed to create a commercial one.

Citic Securities International, the global arm of Citic Securities, completed the purchase of CLSA midway through 2013, paying over a $1 billion for it, and bringing to a close a long courtship. Citic sealed the deal for the outstanding shares of CLSA after it had previously purchased a 19.9% stake in the company from former shareholder, Crédit Agricole, proving to the financial world in the process that Chinese players had ambitions beyond their home region.

Since the tie-up in July, 2013, Citic and CLSA have jointly worked on 39 deals, including 12 IPOs, three placements, 23 DCM transactions (raising over $9billion) and one M&A deal.