(Yicai) June 16 -- China International Capital Corporation’s planned acquisition of Dongxing Securities and Cinda Securities, two mid-sized competitors, has entered the regulatory approval stage, moving the deal closer to forging a brokerage giant with over CNY1 trillion (USD147.9 billion) of assets.

The Shanghai Stock Exchange has accepted CICC’s application for a share swap deal to buy and absorb Dongxing and Cinda, the Shanghai-listed firm said in a statement late yesterday.

On Nov. 19, CICC announced it had signed a preliminary share-swap merger deal with Dongxing and Cinda, aiming to create a brokerage firm with just over CNY1 trillion of assets. A month later, it unveiled the first detailed scheme for the share swap.

Late last month, CICC disclosed another draft acquisition plan, according to which the company would issue more than 3.1 billion Chinese mainland shares priced at CNY36.68 (USD5.42) each. The swap prices were set at CNY16.05 for Dongxing and CNY19.11 for Cinda, with swap ratios of one to 0.4376 and 0.5210, respectively.

CICC, Dongxing, and Cinda are all controlled by wholly state-owned investment company Central Huijin Investment. As of Dec. 31, Central Huijin directly held 40 percent of CICC and indirectly owned 45 percent of Dongxing and 79 percent of Cinda.

Once the deal is closed, the post-merger company will assume all assets, liabilities, businesses, employees, contracts, qualifications, and all other rights and obligations of Dongxing and Cinda, according to CICC.

CICC’s net profit jumped 72 percent to CNY9.8 billion (USD1.4 billion) last year from the year before on a 34 percent increase in operating revenue to CNY28.5 billion (USD4.2 billion). Dongxing and Cinda had operating revenues of CNY4.7 billion and CNY4 billion and net profits of CNY2.1 billion and CNY1.9 billion.

CICC had CNY782.8 billion (USD115.8 billion) of assets under management as of Dec. 31, while Dongxing and Cinda had CNY114.2 billion and CNY130 billion, respectively, for a total of just over CNY1 trillion.

CICC’s shares [SHA: 601995] closed 1.8 percent higher at CNY34.28 (USD5.07) each in Shanghai today, while its Hong Kong-listed stock [HKG: 3908] gained 1.5 percent to finish at HKD21.12 (USD2.70). Dongxing [SHA: 601198] added 1.1 percent to CNY13.01, and Cinda [SHA: 601059] gained 1 percent to CNY15.62.

Editor: Futura Costaglione