HKEX acquires Shenzen-based tech company

The firm plans to buy a 51% equity interest.

Hong Kong Exchanges and Clearing Limited (HKEX) signed a letter of intent to acquire a 51% majority stake in a Shenzhen Ronghui Tongjin Technology (Ronghui Tongjin).

The acquisition will be completed through an increase in registered capital of Ronghui Tongjin. It will help reduce HKEX’s reliance on third-party vendors, manage development costs and reduce implementation risks.

HKEX will also benefit in the longer term from Ronghui Tongjin’s network and technological capabilities to develop future IT strategic initiatives, tapping into new market segments and client bases.

It is expected, subject to the deal’s completion, that Kingdom’s equity interest in Ronghui Tongjin will fall to 29.4 per cent from the current 60%, while the equity interest of Ronghui Tongjin’s employees will fall to 19.6% from the current 40 per cent.

The transaction is subject to the signing of binding agreements. The parties intend to complete the transaction in the second quarter of 2019.