HONG KONG – Ant Group has outbid Citadel Securities for Credit Suisse’s investment bank venture in China, in a surprise move that will be subject to close regulatory scrutiny, people familiar with the matter said.
The bid by the Chinese fintech giant, which is backed by billionaire Jack Ma, to build a securities business using Credit Suisse’s operations will face a thorough review because China favours a foreign buyer, the people said.
The investment banking and brokerage licence was originally awarded to the Swiss bank to help open the country’s financial sector to global competition, one of the people said.
That preference poses a dilemma for UBS Group, which now owns Credit Suisse. For now, the bank will have to choose between the higher local bid from Ant, or the lower Citadel offer that is more likely to win government approval, the people said.
The negotiations are ongoing and other bidders may still join the fray, one of the sources said.
Representatives of UBS and Ant declined to comment.
UBS is struggling to attract interest in the unit from global firms because of escalating geopolitical tensions, a crackdown on bank data flows and the struggling economy. The bank faces a difficult balancing act because the venture’s Chinese partner, Founder Securities, may reject the lower offer from Citadel, delaying the sale process, the people said.
Citadel Securities, founded by billionaire Ken Griffin, was the only global firm to submit a bid in late December, offering about 1.5 billion yuan to 2 billion yuan (S$283.5 million to S$378 million), people said at the time.
Credit Suisse has sought around 2 billion yuan for the entire China unit, including the stake held by Founder Securities. Before it collapsed in March, the Swiss bank had offered to buy out the remaining stake from its partner for 1.14 billion yuan, valuing the firm at about 2.3 billion yuan. The agreement was cancelled after the UBS takeover, people familiar with the matter said earlier.
UBS is required to find a buyer for the Credit Suisse platform because it already controls a securities firm in China and cannot hold two licences in the same business. The Credit Suisse unit in China mainly consists of the investment banking business and a brokerage, after the wealth operation closed in 2023.
Ant’s bid comes after Chinese regulators wrapped up an almost three-year probe into the fintech firm founded by Mr Ma, imposing a 7.12 billion yuan fine in July. The billionaire’s run-in with Beijing has cost his empire – including Ant and Alibaba Group Holding – more than US$800 billion (S$1.1 trillion) in lost valuation, while derailing what would have been the largest initial public offering ever.
Winning such a permit would help Ant plug a gap, adding one of the last missing pieces to its financial footprint. The company’s operation ranges from online payments to wealth management and lending – the reason why the company is applying for a financial holding licence to appease regulator demands for greater supervision.
The company has been planning a restructuring that will break off some operations that are not core parts of its China financial-related business. It is looking at leaving its blockchain, database management and international businesses out of the main entity, which will be used to apply for the financial holding permit, people familiar with the matter have said. BLOOMBERG
