CITIC SECURITIES COMPLETES BUY OF CLSA

As China struggles to reform its financial system, an experiment of sorts is about to begin in Hong Kong with the completion of a deal to merge China’s largest brokerage with a Western investment firm known for its sharp analysis and big personalities.

Citic Securities Co. said on Wednesday it closed on its purchase of Hong Kong-based brokerage CLSA Asia-Pacific Markets from French bank Credit Agricole S.A. for US $ 1.25 billion.

The sale was approved by the board of Credit Agricole at a meeting in Amsterdam on Wednesday.

The deal’s conclusion marks the first major acquisition by a Chinese broker of a foreign competitor and is a stark example of a Chinese investment bank taking advantage of the global economic weakness to buy assets from struggling company.

It also marks a test of whether a Chinese firm can effectively manage a company that traces its roots to Hong Kong’s rough and tumble stock market.

Taking over CLSA, a brokerage that specializes in stocks in Asia, increases Citic’s ability to raise capital for Chinese companies by tapping CLSA’s global client list of 1,700 big institutional investors.