"Guolian + Minsheng" The merger registration of the two securities firms has been approved, triggering a wave of consolidation in the securities industry

Guolian Securities and Minsheng Securities have taken a decisive step in the review process of their merger.

On December 27, the China Securities Regulatory Commission (CSRC) approved Guolian Securities' issuance of shares to acquire Minsheng Securities. Minsheng Securities, Minsheng Fund, and Minsheng Futures will officially be absorbed and merged into Guolian Securities, with actual control formally transferring to Guolian Group under Wuxi State-owned Assets.

It is noteworthy that the completion of the registration approval for this merger occurred just 10 days after the exchange-level review was accepted.

This means that the entire process of this brokerage integration transaction took only 3 months from the acceptance by the exchange on September 27 to the final registration approval; from the board resolution to initiate the acquisition on April 26 of this year to now, it has only taken 8 months.

It is worth mentioning that this is the first brokerage acquisition case to receive approval from the CSRC since the comprehensive implementation of the registration system in 2023 and the delegation of merger and acquisition review authority to the exchanges. It is also the first brokerage integration transaction approved by the CSRC since CITIC Securities' acquisition of Guangzhou Securities five years ago.

The efficient advancement of this acquisition integration is seen in the industry as a sign of regulatory support for supply-side integration in the securities industry.

"In the bottom cycle of the industry, the securities sector needs to integrate and improve efficiency through supply-side reform, which is also an important way to promote the strengthening and expansion of the securities industry," pointed out an investment banker in Beijing. "Many domestic brokerages are largely controlled by local state-owned assets, which brings certain resistance to supply-side integration in the industry. However, the emergence of cases like Guolian's acquisition of Minsheng indicates that there is still room for integration among mid-tier and above securities firms, which can promote the increase of larger leading institutions, benefiting the concentration and stability of the industry."

Although Guolian Securities and Minsheng Securities have similar capital strengths, there are still certain limitations in terms of institutional business access, qualification applications, and classification evaluations, and they have not fully leveraged their respective resource advantages. On the other hand, Guolian Securities and Minsheng Securities have significant structural and regional complementarity in their businesses.

From the perspective of business strengths, Minsheng Securities excels in investment banking, and its recent "investment + investment banking + research" model has achieved mutual promotion among investment banking, institutional research, and equity investment businesses. Meanwhile, Guolian Securities has accumulated strengths in wealth management, fund advisory, asset securitization, and derivatives.

According to rough estimates based on the mid-year report data of the two institutions for 2024, the combined net asset scale of the new institution after the integration of Guolian and Minsheng will exceed 34.88 billion yuan, surpassing Changjiang Securities, with total assets reaching 166.626 billion yuan, exceeding Soochow Securities, placing both indicators around the top 20 in the industry.

An individual close to Guolian Securities analyzed that this restructuring will enhance the new institution in four areas: investment banking, wealth management, regional channel layout, and financial market expansion.

"Minsheng Securities has 38 branches and 44 business offices nationwide, focusing on the Henan region, while Guolian Securities has 16 branches and 83 business offices nationwide, with strong market influence and high market share in Wuxi and the southern Jiangsu region, showing clear regional complementary advantages," said the individual close to Guolian Securities. "The advantages of Guolian Securities in derivatives will complement Minsheng Securities' strengths in fixed income, promoting optimal allocation of resources, talent, and business between the two parties Guolian Group previously stated that investing in Minsheng Securities is an important measure to implement the Yangtze River Delta integration development strategy, aiming to create a collaborative development platform between Wuxi and Shanghai, better connecting the financial, technological innovation, and industrial resources of the Yangtze River Delta, and helping Wuxi become a strategic pivot city in the Shanghai metropolitan area; secondly, it serves as an effective way to leverage financial support for local development, effectively supporting local efforts to attract and cultivate high-quality innovative enterprises, helping companies enhance their value through listings and other means, and assisting in industrial transformation and upgrading.

In fact, the approval of this integration may only be the prelude to a wave of consolidation in the securities industry—currently, there are at least six integration and acquisition cases in the works, including "Guotai Junan + Haitong," "Guoxin + Wanhe," "Xibu + Guorong," "Ping An + Founder," "Pacific + Huachuang," and "Zhejiang Merchants + Guodu," with no fewer than eight cases being advanced within the year.

"As the first broker merger approved by the exchange since 2024, it has a certain indicative significance, indicating that more broker integrations are expected to gain momentum in the review process in the future," said the investment banking professional. "Conversely, this may also stimulate the emergence of more market-oriented integration cases among brokers."