J.P. Morgan to Pay USD1 Billion for Rest of China Fund Management JV
Dou Shicong
DATE:  Aug 25 2020
/ SOURCE:  Yicai
J.P. Morgan to Pay USD1 Billion for Rest of China Fund Management JV J.P. Morgan to Pay USD1 Billion for Rest of China Fund Management JV

(Yicai Global) Aug. 25 -- J.P. Morgan Chase & Co. is expected to pay CNY7 billion (USD1 billion) for its Chinese partner’s stake in their fund management joint venture. That represents a 52 percent premium on the appraised value of the equity.

Shanghai International Trust put its 49 percent of China International Fund Management up for sale yesterday on the Shanghai United Assets and Equity Exchange. J.P. Morgan Asset Management has first refusal.

J.P. Morgan won a bid to buy 2 percent of CIFM’s stake for CNY241 million last August, raising its ownership to 51 percent. The partners reached a consensus in April to further hike that to 100 percent, which would make it the first mutual fund business in China to be wholly owned by a foreign company.

CIFM had CNY1.1 billion in operating revenue and CNY290 million (USD42.0 million) in net profit last year, and the value of its 49 percent stake was CNY4.6 billion as of the end of last year, according to information on the SUAEE.

China has been advancing its financial opening-up in recent years. The country eased the upper limit on foreign ownership in JV securities, funds and futures companies to 51 percent in 2018 and was to lift the limit in three years. It announced last year that it would ease restrictions on foreign ownership this year ahead of schedule.

In June, J.P. Morgan also received regulatory approval to increase its stake in J.P. Morgan Futures to 100 percent from 49 percent. The procedure was completed in July, making J.P. Morgan Futures China’s first wholly foreign-owned futures company.

Editor: Peter Thomas

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Keywords:   JP Morgan,China International Fund Management