CICC Forms $70 Million Joint Venture with Tencent
China International Capital Corp. Ltd. (HKEX: 3908) announced it will launch a joint venture with a subsidiary of Tencent Holdings Ltd. (HKEX: 0700) to deliver technology development and digital operational support services.
The deal with investment firm Tencent Digital Ltd., implies a starting capital of $70 million. CICC will hold a 51% stake in the venture, while Tencent's subsidiary will own the remaining 49 percent, CICC said in a statement last night.
The joint venture will aim to accelerate the development of CICC's retail brokerage, enhance service efficiency of its investment consultants, as well as boost its marketing, risk control and wealth management businesses, the Beijing-based company said.
CICC, which raised $811 million in its initial public offering in Hong Kong in 2015, also said its know-how, the company's team with a high standard of skill, will take a pivotal role in the new venture's financial products, asset allocation and technological capabilities. Tencent, on its part, will supply its "extensive customer base and ecological advantages, digital expertise and experience, and technical and operational professionals," according to the statement.
"We are pleased to collaborate with Tencent, a tech enterprise with outstanding capabilities and substantial experience in digitalization, to explore the huge growth potential of the digital future," Mingjian Bi, the chief executive officer of CICC, said in a statement.
"Digitalization of financial services provides a secular opportunity for the industry. Combining the strengths of CICC and Tencent, we look forward to offering more customized and differentiated FinTech services to users," Martin Lau, the President of Tencent, added.
Shares in Tencent closed down 2 percent, at HK$328.40, in Hong Kong on Wednesday. CICC also ended down 2 percent, at HK$14.96 per share.
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