Friday 24 May 2024
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KUALA LUMPUR (Dec 29): CIMB Group Holdings Bhd said it had completed the sale of its subsidiary's 25.01% stake in CGS-CIMB Securities International Pte Ltd (CSI) and 25% shareholding in CGS-CIMB Holdings Sdn Bhd (CCH) to CGS International Holdings Ltd (CGI), which was formerly known as China Galaxy International Financial Holdings Ltd.

This follows the final call option exercised by CGI to acquire the remaining stakes of CIMB's wholly-owned unit CIMB Group Sdn Bhd in CSI and CCH's stockbroking joint venture (CGS-CIMB JV), said CIMB in a statement on Friday.

CGI is a subsidiary of China Galaxy Securities Co Ltd (CGS), the fourth largest securities firm in China by revenue in the first half of 2023.

CIMB said it will receive an estimated gross proceeds of RM780 million for the sale of the 25.01% and 25% stakes, bringing total proceeds for the sale of its 100% original stockbroking business since 2018 to about RM2.5 billion.

In 2018, CIMB entered into a partnership agreement with CGI to operate a regional stockbroking business in Asia, through the sale of CIMB’s stockbroking business into the CGS-CIMB JV, where CIMB and CGI originally owned 50:50.

The partnership agreement incorporated put and call options for CGI to acquire CIMB’s stakes in the CGS-CIMB JV over a period of time.

CGI exercised the first call option and completed the acquisition of the 24.99% stake in CSI and 25% shareholding in CCH from CIMB in December 2021, and has now completed the acquisition of the remaining balance in the CGS-CIMB JV to enable CGI to have full ownership of the regional stockbroking business.

CIMB group chief executive officer Datuk Abdul Rahman Ahmad said the partnership had enabled the CGS-CIMB JV to grow into one of the leading stockbroking firms in the region.

“We are thankful to CGS for the partnership, and we look forward to exploring ways where we can collaborate together in the future,” he added.

CIMB said it had put in place a transition plan, together with the CGS-CIMB JV, to ensure the change in shareholdings will not result in any disruptions, and the services will continue to be available for all CIMB customers and clients to conduct their activities.

CIMB shares closed up one sen or 0.17% at RM5.85 on Friday, bringing the group a market capitalisation of RM62.39 billion.

Edited ByS Kanagaraju
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