Bear Stearns and Citic Securities have agreed to invest US$1 billion in each other, the Financial Times reported. Citic, China's largest listed brokerage, will buy a US$1 billion stake in Bear Stearns over a 40-year period. This translates into a 6% stake in the US firm. Citic also has the option to raise its holding to 9.9%. Bear Stearns will invest an identical amount – US$1 billion – in Citic over six years, giving it a 2% stake. It has the option of buying another 3% over five years. The companies will also create a joint venture where each party holds 50% of the equity. The new entity would combine Bear Stearns' businesses in Hong Kong, Tokyo and Singapore with Citic's operations in Hong Kong to offer a range of financial services. Citic will also pay an undisclosed "financial consideration" to the US firm. The partnership would be the first of its kind involving a Chinese company and an American one.