CITIC Securities Co, one of China's largest brokerages, formally announced on yesterday that it would cancel a proposed $1 billion investment in Bear Stearns Cos after the Wall Street brokerage was bought by JPMorgan Chase & Co.
CITIC said since Bear Stearns Cos agreed to be taken over by JPMorgan after running short on cash, its basis and preconditions for strategic co-operation with Bear Stearns no longer exist.
Authorized by the Board, CITIC decided to terminate the consultations of mutual investment and business cooperation between two companies which were proposed before.
CITIC Securities and Bear Stearns signed a comprehensive strategic cooperation plan in October last year. CITIC Securities and Bear Stearns would convertibly hold each other's shares for about 1 billion US dollars, at the same time to set up the joint venture in Hong Kong in the proportion of 50 percent held by each company, and further more to develop new business. CITIC Securities would like to promote its own international strategy by take this cooperation.
Since the above signing of the cooperation plan is an informal agreement, CITIC Securities said the company will not take any responsibility and obligations after canceling the plan, as well as take no investment risk and losses because it had not pay any price.
Bear Stearns, the United States's fifth-largest investment banks, has lost billions of dollars in assets because of loan-to-dimensional crisis.
On March 16 evening, JP Morgan Chase and Bear Stearns announced, JP Morgan Chase will buy the Bear Stearns with two US dollars per share, which is far lower than the Bear Stearns's share price in October last year when it decided the strategic cooperation with CITIC Securities.
CITIC Securities said it would continue to look for other opportunities to expand overseas