Alibaba Group Holding Ltd has acquired another chunk of shares in China International Capital Corp for about HK$1.8bn ($230mn), enlarging its stake in a prestigious investment bank that can help propel deals and financial transactions around the world.
The e-commerce giant bought 117.1mn Hong Kong-listed shares at HK$15.50 apiece on February 14, CICC said in a filing.
That expanded its stake to about 11.7% of stock listed in the city from roughly 5%, almost matching Tencent Holdings Ltd’s 12%.
CICC’s Hong Kong shares leapt as much as 11.1% yesterday, marking their biggest intraday jump in more than a year.
Alibaba joins arch-rival Tencent as a backer of CICC, once dubbed China’s Goldman Sachs after it brought some of the country’s largest state-run firms to market.
The financial house however has been reducing its dependence on volatile investment banking fees and expanding its business catering to rich individuals.
In 2017, it completed a $2.5bn purchase of China Investment Securities Co, plunging into the retail investor market.
Set up in 1995, CICC was part-owned by New York-based Morgan Stanley until 2010. Its shares were listed in Hong Kong in 2015.
Overall, Alibaba now holds about 4.84% of CICC’s total issued shares on a fully diluted basis, an Alibaba representative said.
“Its strength as a boutique investment bank is unparalleled domestically. It will be a good complement to Alibaba, which is doing many deals and can use a lot of advisory service,” said Richard Cao, a Shenzhen-based analyst at Guotai Junan Securities Co. “The purchase serves Alibaba’s business strategy.”
Attendees walk past the Alibaba Group Holding booth at the 2019 Consumer Electronics Show in Las Vegas. The e-commerce giant bought 117.1mn Hong Kong-listed shares of China International Capital Corp at HK$15.50 apiece, CICC said in a filing.
