We’ve seen the headlines about Citic Securities’ US$1.25bn acquisition of CLSA Asia Pacific announced late last week. The purchase (from France’s Crédit Agricole) could augment Citic’s plans for overseas expansion, enabling it to better compete with other investment banks.
Don’t leave me
The question of whether the firm can hold onto CLSA’s top talent is already making the rounds. It’s a fair one given that some financial institutions have struggled to prevent a talent exodus from acquired firms. There’s of course Nomura, which had a hard time retaining employees from Lehman Brothers once their two-year guaranteed bonuses expired. Credit Suisse also faced a similar problem when bankers from DLJ resigned after its US$14.7bn purchase.
No mass moves expected – yet
Given current market conditions, it’s likely that CLSA’s Asian employees will stay put, while waiting to see how things shape up, says Swapna Reddy, division manager, banking, finance and accounting, Links Recruitment.
Besides, she adds that the acquisition looks like a “good symbiotic” one. For instance, CLSA can capitalise on Citic’s investment banking client access; while Citic can tap into CLSA’s international distribution network to develop its global presence. “Based on this, it does not look like a major threat to CLSA’s employees,” she says.
Lay offs are possible
That said, as with any acquisition, redundancies are possible. “There could be a few lay offs; more so in corporate functions and investment banking areas, where there is a duplication of jobs.”
Chinese government control is another consideration that could come into play for employees. Reddy says: “There is concern regarding the new Chinese ownership and how things are going to change internally. Integrating both cultures will be a big task and long-term execution of this transaction is very critical for employee stability.”