Shanghai and Hong Kong-listed Guolian Securities and Shanghai-listed Sinolink Securities called off a proposed tie-up that could have created a RMB 93 billion ($13.8 billion) industry behemoth less than a month after the merger was announced Sept. 20, reported Caixin.
State-owned Guolian, which is ultimately owned by the Wuxi government, and Sinolink said the two companies failed to agree on some of the core terms of the deal and decided to terminate the combination, said Caixin.
The proposed deal was unprecedented and complex, involving the purchase of some equity first and a share swap, a person close to the deal told Caixin. After intermediary agencies got involved in due diligence, the companies didn’t see how to proceed in a quick and efficient way, the person said.
The deal would have propelled the merged company into the top 10 brokerages in China. Guolian ranks 55th among 98 brokerages tracked by the government-backed Securities Association of China (SAC), with assets of RMB 27.3 billion ($4 billion), while Sinolink is 33rd with RMB 46.9 billion.