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TLDR:
- UBS is selling a partial stake in a securities joint venture to Beijing State-owned Asset Management (BSAM).
- The stake sale is part of UBS’s consolidation efforts in China after its merger with Credit Suisse.
UBS is taking a significant step in consolidating its operations in China by selling a 36% stake in one of its securities joint ventures to Beijing State-owned Asset Management (BSAM). The Swiss bank inherited the ownership from Credit Suisse and has been looking for a buyer for the unit since last year. UBS is also a partner in another securities joint venture in China, UBS Securities, in which it holds a 67% stake. Here are some key points highlighted in the article:
Founder Securities, the joint venture partner, is selling its entire holding of 49% in the venture, while UBS is selling a 36.01% stake to BSAM for $91.4 million. UBS initially held a 51% stake in the venture, and it is unclear if they still hold any remaining shares. The stake sale became necessary due to Chinese securities regulations that prohibit entities from having majority-owned securities firms locally.
BSAM outbid Citadel Securities for the deal, as UBS plans to increase its ownership in UBS Securities, potentially requiring BSAM to auction off some or all of its holdings. UBS CEO Sergio Ermotti emphasized the importance of the sale to their long-term business partner, with whom they have worked closely for nearly two decades.
The article highlights the dynamics of the stake sale, the regulatory factors at play, and the strategic decisions made by UBS to enhance its presence and compliance in the Chinese securities market.
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