On December 17, the Shanghai Stock Exchange's Mergers and Acquisitions Committee announced that Guolian Securities' issuance of A-shares to acquire 99.26% of Minsheng Securities' shares and raise supporting funds has been approved.
This is the first broker acquisition case to receive approval from the exchange since the comprehensive implementation of the registration system and the delegation of M&amp;A review authority to the exchanges in 2023.
It is worth mentioning that since being accepted on September 27, Guolian Securities' acquisition of Minsheng Securities has passed the exchange's review process in less than three months, and it has been less than eight months since the boards of directors of the two brokerages proposed the integration.
According to the process arrangement, the merger currently only requires the final step of registration with the China Securities Regulatory Commission (CSRC).
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.
&#34;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,&#34; pointed out an investment banker in Beijing. &#34;Some 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 securities firms, which can promote the increase of larger leading institutions and enhance the concentration and stability of the industry.&#34;
Since Wuxi Guolian Group became the largest shareholder of Minsheng Securities in 2023, the merger of the two brokerages has indeed been in the works for a long time.
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 complementarities in their businesses.
From the perspective of business strengths, Minsheng Securities has a prominent investment banking business, and in recent years, its &#34;Investment + Investment Banking + Research&#34; model has achieved mutual promotion among investment banking, institutional research, and equity investment businesses. Meanwhile, Guolian Securities has accumulated experience in wealth management, fund advisory, asset securitization, and derivatives.
In terms of channel endowments, Minsheng Securities has branch network coverage in the Henan region, while Guolian Securities has a high market penetration rate in Wuxi and the southern Jiangsu region.
Based on rough estimates from the mid-2024 financial data of the two institutions, the new institution formed by the integration of Guolian and Minsheng will have a combined net asset scale of 34.88 billion yuan, surpassing Changjiang Securities, and total assets will reach 166.626 billion yuan, exceeding Soochow Securities, with both indicators ranking around the top 20 in the industry.
In fact, the advancement of Guolian and Minsheng is just the prelude to the wave of integration in the securities industry—currently, there are at least six more integration and acquisition cases in the works, including &#34;Guotai Junan + Haitong,&#34; &#34;Guoxin + Wanhe,&#34; &#34;Xibu + Guorong,&#34; &#34;Ping An + Founder,&#34; &#34;Pacific + Huachuang,&#34; and &#34;Zhejiang Merchants + Guodu.&#34;
&#34;As the first broker merger to be approved by the exchange since 2024, it has a certain indicative significance, suggesting that more broker integrations are expected to receive progress in the review process in the future.&#34;
&#34;The aforementioned investment banking professionals pointed out that 'this may conversely stimulate more cases of market-oriented integration among brokerages.'&#34;
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Guolian Sec's acquisition of 99.26% of Minsheng Securities was approved by the Shanghai Stock Exchange on December 17, becoming the first brokerage acquisition case since the implementation of the registration system in 2023. The acquisition took less than 3 months from acceptance to approval, and only the registration with the China Securities Regulatory Commission remains. Industry insiders believe that this efficient progress demonstrates regulatory support for supply-side integration in the securities industry, which may promote industry concentration and stability. The business operations of Guolian and Minsheng are complementary, and the merger will help leverage each other's resource advantages

- On December 17, the Shanghai Stock Exchange's M&A Committee approved Guolian Securities' acquisition of 99.26% of Minsheng Securities, marking the first broker acquisition approved since the implementation of the registration system in 2023.  
- The review process took less than three months, indicating regulatory support for supply-side integration in the securities industry, which is seen as essential for enhancing efficiency during a downturn.  
- The merger is expected to create a new entity with a net asset scale of 34.88 billion yuan, surpassing Changjiang Securities, and is part of a broader trend of consolidations in the sector, with several other mergers in the pipeline.

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The first exchange-reviewed securities acquisition case has been approved. Only registration remains for the integration of Guolian Sec and Minsheng, "just one step away."