DLA Piper, Clifford Chance and Woo Kwan Lee & Lo have together advised on the first takeover of a Hong Kong-listed company by a mainland brokerage.

Hai Tong Financial has acquired Taifook Securities, from NWS Holdings for US$231m. Hai Tong is a subsidiary of Shanghai-listed Hai Tong Securities, which is currently the second largest securities firm in China by assets (the largest being CITIC Securities). Taifook Securities is the largest brokerage in Hong Kong. 

"This deal marks the first takeover by a mainland brokerage of a Hong Kong listed counterpart and will enable Hai Tong to tap huge opportunities as the inflow of Chinese money into Hong Kong’s stock market continues to grow," said Esther Leung, DLA Piper partner and co-head of capital markets Asia.

Buying a brokerage in Hong Kong enables Chinese companies to immediately obtain business licenses and quickly expand their presence in an international financial market. This landmark transaction could just be the trigger for more Chinese brokerages to follow suit.

"The Chinese government is expected to gradually open up more channels for mainland investors to invest in overseas markets, among which Hong Kong is a key destination,” said Jeffrey Mak, partner at DLA Piper.

Top ten securities firms for China mainland IPOs by market share 2009

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