CIMB completes divestment of residual stake in CGS-CIMB

KUALA LUMPUR: CIMB Group Holdings Bhd has via CIMB Group Sdn Bhd completed the sale of its 25.01% and 25% shareholding in CGS-CIMB Securities International Pte Ltd (CSI) and CGS-CIMB Holdings Sdn Bhd (CCH) to CGS International Holdings Ltd (CGI).

In a statement, CIMB said this was 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, as per the terms of the original partnership agreement.

CGI is a subsidiary of China Galaxy Securities Co Ltd, 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 RM780mil 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 RM2.5bil.

"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,” said CIMB group CEO Datuk Abdul Rahman Ahmad.

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 CSI and CCH respectively from CIMB in December 2021.

It 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.