Investment firm T. Rowe Price Group Inc. (TROW) is in advanced talks to buy a stake in Asset Management Co. (“China AMC”) from its holding company Citic Securities.
Citic Securities, which is aggressively seeking licenses for margin trading and short selling, has orders from the regulators to reduce its ownership in China AMC to 49% or below. Currently, it owns 100% of China AMC. To comply with regulators, Citic Securities must sell majority ownership of China AMC. The deal will be valued at approximately ¥9 billion ($1.32 billion).
China AMC is China’s biggest fund management firm. It manages more than ¥260 billion ($38 billion) and is a big contributor to Citic Securities’ revenue.
Citic Securities is also considering selling a percentage of wholly-owned subsidiary, China Securities Co.
T. Rowe Price is aggressively expanding in Asia. During January 2010, the company completed its purchase of its initial stake in India’s fourth largest mutual fund company, UTI Asset Management Co., for INR6.4 billion ($140 million).
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