Malaysia's CIMB Group Holdings Bhd. has agreed to sell a 50% stake in its stockbroking business to China Galaxy Securities Co. Ltd. for S$167 million.
The company said June 6 that unit CIMB Group Sdn. Bhd. has entered into a conditional share purchase agreement with China Galaxy Securities unit China Galaxy International Financial Holdings Ltd. to sell half of CIMB Securities International Pte. Ltd. to the latter.
CIMB Securities International is the Malaysian bank's holding company for the cash equities business encompassing institutional and retail brokerage, equities research and associated securities businesses. The business spans across a number of Asian countries, including Hong Kong, India, Indonesia, Singapore, Thailand and South Korea, as well as the U.K. and the U.S.
Following the stake sale, CIMB Securities International will become a joint venture between CIMB Group and China Galaxy. The venture will be able to make use of the Chinese company's network, market access and business and technological know-how.
The two parties will obtain necessary regulatory approvals, which is expected to be completed in the fourth quarter. The companies are also in talks with respect to the stockbroking business in Malaysia, CIMB noted. However, details of the possible deal were not disclosed.
In October 2016, the companies said they would explore a potential stockbroking joint venture and other areas of cooperation. They had also signed nonbinding terms in relation to the joint venture.
As of June 6, US$1 was equivalent to S$1.38.