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UBS is in talks to sell Credit Suisse’s China securities unit to a Beijing-based government-backed fund, dealing a blow to Ken Griffin’s Citadel Securities, which had made a bid for the bank as it seeks to expand in China.
The Swiss bank is in talks with its mainland securities joint venture partner, Beijing State Asset Management Co., according to two people familiar with the matter.
UBS will maintain its minority stake in Credit Suisse Securities (China), which handles investment banking and securities in mainland China, one of the people said.
In the second stage of the planned deal, UBS will seek to buy the Beijing fund’s 33% stake in UBS Securities, its mainland securities business, after Chinese authorities introduced reforms that allow international banks full control of their mainland units.
The Financial Times reported in January that Miami-based market maker Citadel Securities had made a bid of about 2 billion yuan ($276 million) for Credit Suisse’s China securities business, seeking to expand in China amid rising geopolitical tensions. A person close to Citadel Securities said the company remains keen to expand in China even if its bid for the UBS unit is unsuccessful.
Ant Group, the Chinese fintech company founded by Jack Ma, has also offered to buy UBS Securities’ unit, testing the company’s ability to expand after a lengthy crackdown by Beijing.
The talks between UBS and Beijing State Asset Management were first reported by Bloomberg. UBS and Citadel Securities declined to comment. Ant Group and the Beijing fund did not respond to requests for comment.
UBS must sell the Credit Suisse unit it took over when it bought a rival bank last year because it cannot hold two mainland China securities licences.
The deal requires the consent of Chinese joint venture partner Founder Securities, which holds a 49% stake in the Credit Suisse subsidiary. UBS holds a 51% stake.
Regulators have previously indicated they are keen to sell the unit to an overseas bidder, as the licence was originally issued to a foreign company, the Financial Times reported in February.
Additional reporting by Chan Ho-him in Hong Kong
