TAIPEI–Fubon Securities (�I���Ҩ�), the securities unit of Taiwan-based Fubon Financial Holding Co. (�I����), has secured approval from the Financial Supervisory Commission (FSC, ���|) to buy a stake in China’s Huishang Futures.
The FSC, Taiwan’s top financial regulator, gave Fubon Securities the green light on Tuesday, making it the first Taiwanese securities firm to secure approval from the FSC to acquire a stake in a Chinese futures firm.
The deal, in which Fubon Securities plans to acquire up to 40 percent stake in Huishang Futures for no more than 360 million Chinese yuan (US$58.1 million), still needs approval from the China Securities Regulatory Commission, Fubon Financial said.
Because Huishang Futures plans to make a rights issue to complete the deal, the exact stake and purchase value related to the acquisition will be finalized only after the details of the rights issue are available, Fubon Financial said.
Should the deal be consummated, it will enable Fubon Securities and Fubon Financial to further extend their reach and visibility in China’s market.
According to Fubon Financial, Huishang Futures is headquartered in Hefei of Anhui Province and has a broad sales network covering many major Chinese cities, including Beijing, Shanghai, Shenzhen, Wuhan, Dalian and Zhengzhou.
Huishang Futures ranks as the largest futures trader on the Zhengzhou Commodity Exchange and the fourth largest on the Dalian Commodity Exchange.
It posted a return on equity of 23.7 percent and 16.7 percent in 2012 and 2013, respectively, ranking it among the top three Chinese futures traders.
Fubon Financial said the figures indicate that Huishang Futures is a fundamentally sound company, which is why it has wanted to buy a stake in the company and set up a strategic partnership that will help extend its reach in China.
Fubon Financial expects the pending deal to offer synergies for the two parties because Taiwan’s futures market focuses on financial futures while China’s market puts the emphasis on commodity futures trading.
The deal would only add to Fubon Financial’s extensive presence in China.
In January 2014, Fubon Financial teamed up with another subsidiary, Taipei Fubon Commercial Bank, to acquire an 80 percent stake in Shanghai-based First Sino Bank. First Sino Bank was renamed Fubon Bank (China) Co. in April 2014.
Before the acquisition of the Shanghai bank, Fubon Financial acquired a 19.99 stake in Xiamen City Commercial Bank through its Hong Kong banking unit, Fubon Bank (Hong Kong), at the end of 2008.
As of 11:23 a.m. shares of Fubon Financial had fallen 0.15 percent to NT$64.90 (US$2.12) as investors locked in the stock’s significant gains a session earlier.