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JPMorgan to Own 100% Stake in Securities JV in China
Published on: 2020-04-07
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jpAs China opened its financial markets to foreign firms with the removal of restrictions on ownership effective Apr 1, JPMorgan JPM has agreed to own 100% of its Chinese mutual fund joint venture (JV) - China International Fund Management Co. The bank plans to spend around $1 billion to take the full ownership of the venture from Shanghai International Trust Co.,

The development follows the opening up of the Chinese markets for foreign financial firms. China’s securities regulator — The China Securities Regulatory Commission (“CSRC”) — removed restrictions on foreign ownership. Notably, it now allows foreign companies to take full control in securities JVs by buying out their local partners or setting up their own money management and investment banks.

Notably, JPMorgan is the first U.S. bank to take full control of its mutual fund operations in China.

Financial terms of the deal remain undisclosed. However, JPMorgan paid more than 33% premium to CIFM’s net asset value and spent $35 million, while buying a 2% stake to gain controlling interest in the venture in August 2019.

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