Jack Ma's Ant Group Beats Citadel In Bid For Credit Suisse's China Unit: Report

Ant Group Co has reportedly outbid Citadel Securities LLC for the acquisition of Credit Suisse‘s investment bank venture in China. This unexpected development is expected to undergo strict regulatory scrutiny.

What Happened: Ant Group, a fintech giant backed by Jack Ma, has emerged as the top bidder for Credit Suisse’s China unit, Bloomberg reported on Sunday, citing sources familiar with the matter. The proposed acquisition, aimed at establishing a securities business using Credit Suisse’s operations, will face intense regulatory review due to China’s preference for a foreign buyer.

This preference poses a challenge for UBS Gr UBS, the current owner of Credit Suisse. UBS must now choose between Ant’s higher local bid and Citadel’s lower offer, which is more likely to secure government approval. Negotiations are ongoing, and additional bidders may still enter the competition.

UBS did not immediately respond to Benzinga's request for comment. Ant Group declined to comment.

UBS is facing challenges in attracting interest from global firms due to escalating geopolitical tensions, a crackdown on bank data flows, and a struggling economy. The bank is also dealing with a delicate situation as its Chinese partner, Founder Securities, may reject Citadel’s lower offer, thus delaying the sale process.

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Why It Matters: This development comes at a time when UBS is navigating a complex integration process following its acquisition of Credit Suisse. Despite challenges, UBS has shown resilience, beating Q4 earnings estimates and announcing a $1 billion share buyback in early February.

However, Credit Suisse, under UBS’s control, has faced its share of difficulties, including a loss of over $4 billion in Q2 2023 and a subsequent net loss of $279 million for Q4. This latest development with Ant Group’s bid for Credit Suisse’s China unit adds another layer of complexity to UBS’s ongoing challenges.

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Credit Suisse Photo by Michael Derrer Fuchs on Shutterstock