(Yicai) Sept. 6 -- China plans to merge Guotai Junan Securities and its smaller rival Haitong Securities, two of the country’s 10 largest brokerages, creating a new industry titan.

Under the plan they announced yesterday, Guotai Junan and Haitong will combine through a share swap. The new entity would have total assets of about CNY1.68 trillion (USD237.1 billion) and total net assets of CNY330 billion (USD46.6 billion), based on figures reported in their 2023 earnings reports. That would place it ahead of Citic Securities.

The country’s brokerages have embarked on a merger spree this year. This latest proposal represents a major consolidation in China's securities industry and aligns with the country’s broader efforts to create financial champions that are globally competitive.

The merger of the two Shanghai-based firms will create a first-class investment bank that matches Shanghai's status as an international financial center, an industry expert told Yicai.

The pair will share their expertise and customer resources, complement each other's advantages, enhance their ability to serve clients, and increase their management level and operating efficiency, the person noted.

Guotai Junan's actual controller is Shanghai International Group, an assets manager under the Shanghai government. Haitong has no actual controller, but its biggest shareholder is Shanghai Guosheng Group, a state-owned assets operator also under the same administration.

Trading in the shares of both firms will be suspended for up to 25 days, pending the completion of the deal, they said.

Editors: Tang Shihua, Futura Costaglione