Everbright Securities Company Limited, one of the largest securities brokerage firms in China, says it has entered into a sales and purchase agreement with Hong Kong’s financial services firm, Sun Hung Kai & Co. to acquire 70% of its wholly owned subsidiary, Sun Hung Kai Financial Limited, for HK$4.1 billion (US$530 million), according to a company announcement.
Sun Hung Kai & Co. is backed by private equity firm CVC Capital Partners, which acquired a 19% stake of the parent company for approximately HK$2.14 billion (US$274 million) in 2010.
In 2007, Sun Hung Kai Financial also sold a 9.88% stake to Dubai Investment Group, a unit of state-backed diversified financial services firm Dubai Holding, for HK$1.9 billion.
It’s unclear if the two financial investors are selling any of their shares in the transaction.
The company’s subsidiary, Sun Hung Kai Financial, is mainly engaged in the wealth management, brokerage, and capital markets businesses.
The transaction marks a further development of the alliance between China Everbright Group and Sun Hung Kai. The two already have existing partnerships in consumer finance and wealth management through China Everbright Bank.
"This acquisition is an important milestone in our internationalization strategy," says Xue Feng, vice chairman and president of Everbright Securities. "Sun Hung Kai Financial’s strength in the wealth management business is highly complementary to our existing securities business in Hong Kong."
The two plan to run the two businesses independently for a relatively long period of time after the completion of the deal, and do not expect any major management changes.
Sun Hung Kai Financial, with its foundation dating back to 1969, offers customized financial solutions for retail, corporate and institutional clients.
It has a staff force of 900 across Hong Kong, Macau and Mainland China and has over HK$85 billion (US$11 billion) in client assets under management, custody or advice.