Better than Bear

4 May 2010 By John Foley Follow @johnsfoley

The Chinese securities firm had sought a tieup with Bear Stearns, thinking a U.S. partner was the best way to global reach. A rerun with France’s Credit Agricole looks wiser. Citic gets credibility outside China. And Wall Street won’t worry which could be a benefit.

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China's Citic Securities and France's Credit Agricole said they would form a joint venture bringing together the former's mainland Chinese broking business with the latter's corporate and investment banking business.

While the companies have signed a memorandum of understanding, no completion date or details of financial investment were given.

Credit Agricole owns 65 percent of CLSA, the HongKong based brokerage. Under the terms of the deal, Citic would acquire a minority stake in CLSA, according to a person familiar with the situation, and may also acquire a direct stake in Credit Agricole. Citic would also take over as CLSA's jointventure partner in China. CLSA owns a third of its mainland brokerage, with the rest held by Fortune Securities.

Citic signed a deal with Bear Stearns in October 2007, before the Wall Street bank collapsed. Each would have invested $1 billion in the other. Bear was acquired by JPMorgan, and the tieup with Citic was officially abandoned in March 2008.

Credit Agricole statement

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While the companies have signed a memorandum of understanding, no completion date or details of financial investment were given.

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