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China’s Geely has sold its majority stake in Denmark’s €1.6bn Saxo Bank to Swiss private bank J Safra Sarasin, ending an eight-year joint venture that bet on Chinese capital markets opening up to the west.
The 180-year-old J Safra Sarasin, based in Basel and part of a $25bn global empire built by the late Lebanese-Brazilian patriarch Joseph Safra, has acquired Geely’s 49.9 per cent stake in Saxo Bank and Finland’s Mandatum’s 19.8 per cent, in a deal worth about €1.1bn.
J Safra Sarasin and Saxo Bank, known for its trading platforms that allow customers to deal in everything from currencies and commodities to equities and derivatives, will still operate as standalone entities but the deal will allow both to “diversify” into different businesses and geographies, executives said. J Safra Sarasin, for example, will integrate Saxo Bank’s technology.
“We take a long-term view when we make strategic moves. [We are] looking forward to developing the shape and future of financial services together. In the immediate future the two businesses will continue in their strategic paths,” said Daniel Belfer, chief executive of J Safra Sarasin.
The tie-up draws a line under Geely’s unexpected investment in Saxo Bank in 2017 when it became the Danish group’s biggest shareholder. Hangzhou-based Geely was known for its automotive business but had wanted to move into international financial services. Saxo Bank, meanwhile, had big ambitions to enter the lucrative China market at a time when western companies were also jostling for position.
China had looked increasingly accessible and attractive and the level of integration by western groups rose fast. However, US-China tensions, the economically bruising pandemic, a domestic regulatory crackdown and a property crisis meant many global businesses have reduced their investments in China in the past few years.
Foreign investor influence has also faded as Beijing has encouraged efforts to have China’s equity capital markets marshal private funding towards policy goals and prioritise local champions.
Geely Financial Demark said in a statement that the “divestiture of Saxo Bank is in line with Geely Holdings recently announced long-term strategic plans focusing on the Group’s main automotive business”.
Saxo Bank founder and chief executive, Kim Fournais, who had once hoped the bank would be “the gateway to China” added that the group had sold its joint ventures on the mainland back to Geely.
Fournais said Geely was in a “different” industry and the joint venture with J Safra Sarasin meanwhile would be a “100 per cent partnership”. The founder will retain his 28 per cent stake in Saxo Bank.
Joseph Safra was known as the world’s wealthiest banker when he died in 2020. J Safra Sarasin is an arm of the Safra family’s banking interests outside Brazil that has focused on providing wealth and asset management services. It has more than SFr224bn ($255bn) in client assets under management.
Geely Holding has recently signalled an end to its decades-long expansion mode, with founder Li Shufu actively unloading his auto empire’s global assets and streamlining its core business. In a management meeting late last year, Li announced that the group had entered a new phase defined by “consolidation” and “prudence”, with the goal of navigating “a highly competitive market”.
Following the shift, Geely merged two of its electric vehicle sub-brands — Zeekr and Lynk & Co — and shut down Jiyue, its joint EV brand with Baidu.
Additional reporting by Gloria Li
https://www.ft.com/content/b68d3195-2bee-40a7-b2ee-3e77be7b1d2e
