Chinese regulators have just approved Goldman Sachs application to take complete ownership of a key local unit, another step in China’s gradual opening of its financial system to major players from the United States and Europe.
Goldman in December 2020 sought approval to increase its stake in a domestic Chinese business that it had co-owned since 2004. The bank said Sunday that China’s financial markets regulator, the China Securities Regulatory Commission, had given its assent.
The unit, Goldman Sachs Gao Hua Securities Co., will be renamed Goldman Sachs (China) Securities Co.
“This marks the start of a new chapter for our China business following a successful 17-year joint venture,” Goldman Chief Executive David Solomon, Chief Operating Officer John Waldron and Chief Financial Officer Stephen Scherr wrote in a joint statement. Goldman didn’t disclose how much it is paying to acquire the outstanding 49% stake in the venture.
Goldman’s wholly owned subsidiary will house most of the bank’s operations in China, including investment-banking functions such as M&A advisory and securities underwriting, as well as other businesses including trading and wealth management. As part of the reorganization, Goldman has said that onshore businesses owned by its joint-venture partner, Beijing Gao Hua Securities, would be transferred to the unit. The move marks Goldman’s rise to embassy banks status, isolated from changes in the political landscape in a tumultuous time for Sino-American foreign policy relations.
Source: Wall Street Journal