29 December 2023
Kuala Lumpur: CIMB Group Holdings Berhad (“CIMB” or “the Group”) today announced that it has, through CIMB Group Sdn Bhd, completed the sale of its 25.01% and 25.0% shareholding in CGS-CIMB Securities International Pte Ltd (“CSI”) and CGS-CIMB Holdings Sdn Bhd (“CCH”) respectively, to CGS International Holdings Limited (formerly known as China Galaxy International Financial Holdings Limited) (“CGI”).
This is following the final call option exercised by CGI to acquire the remaining shareholding of CIMB Group Sdn Bhd’s stake in the two parties’ stockbroking joint venture (“CGS-CIMB JV”), as per the terms of the original partnership agreement. 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.
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 stake in the CGS-CIMB JV over a period of time. CGI had exercised the first call option and completed the acquisition of the 24.99% and 25% stake in the CSI and CCH respectively from CIMB in December 2021, and has now completed the acquisition for the remaining balance in the CGS-CIMB JV to enable CGI to have full 100% ownership of the regional stockbroking business.
Dato’ Abdul Rahman Ahmad, Group Chief Executive Officer of CIMB Group said, “We are pleased with the successes we have achieved together with CGS over the years where the partnership has 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."
CIMB will receive an estimated gross proceeds of RM780 million for the sale of its residual 25.01% and 25.0% stake in CSI and CCH respectively, bringing the total proceeds for the sale of its 100% original stockbroking business since 2018 to approximately RM2.5 billion.
CIMB has put in place a transition plan, together with 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.
