CEFC China Signs Strategic Agreement to Become Largest Shareholder of CowenCEFC China
March 29, 2017 – CEFC China Energy Company Limited (CEFC China) and Cowen Group, Inc. (Cowen) (NASDAQ:COWN) signed a strategic investment agreement in Shanghai under which CEFC China would acquire 19.9% of the equity interest in Cowen. The deal would make CEFC China the single largest shareholder of the century-old American securities company and start long-term strategic partnership between the two companies. This is the first time that a Chinese private enterprise has become the single largest shareholder of an established American investment bank through strategic investment.
Cowen Group is a well-known securities company listed on NASDAQ. It was first founded in 1918 in New York as a bond trading house and joined the New York Stock Exchange in the 1920s. Cowen is a leader among medium sized US investment banks and is known for its unparalleled research capability, valuable experience, and a team of seasoned investment professionals well versed in healthcare, new energy, and TMT (technology, media and telecom). Worth mentioning is that Peter A. Cohen, current Board Chairman and Chief Executive Officer of Cowen, is former Board Chairman and Chief Executive Officer of Shearson Lehman Brothers, a renowned Wall Street investment bank. A 2013 report ranked Cowen 14th among world’s best investment banks.
Under the Strategic Investment Agreement, CEFC China will acquire 19.9% of the equity interest of Cowen through private placement and bond issuance, making it the largest shareholder in Cowen. The agreement allows CEFC China to appoint three board directors to Cowen who will participate in the firm’s major decisions. The transaction is subject to approval from US regulators and is expected to close in the third quarter in 2017.
“We are pleased to welcome CEFC China as a long-term investor and strategic partner,” said Peter A. Cohen, Chairman and Chief Executive Officer of Cowen. “CEFC, under the leadership of Chairman Ye, is a highly-respected global organization with a broad portfolio of successful businesses and an impressive investment track record. Our two companies have complementary functional expertise, industry focus, geographic coverage and business networks, which creates a unique business development opportunity. This partnership will accelerate growth in Cowen’s core areas of expertise: investment banking, equities, research and asset management.”
Commenting on the investment, Ye Jianming, Chairman of CEFC China, said, “We put a high value on Cowen’s investment research capability in healthcare, new energy and TMT, valuable experience, and a professional team dedicated to capital market services. With the strategic cooperation in industry investment, finance and asset management, we see partnership synergies that can effectively integrate resources and create greater value for both companies. This would enable us to deepen our cooperation and expand it into more industries and wider markets.”
CEFC China will further invest in Cowen to support the expansion of its core business. This strategic partnership will enable CEFC China to establish a cooperation platform that links Chinese and American industrial capital markets. It will also help Cowen establish its regional headquarters in Shanghai which will lead the company’s China or even Asia-Pacific business. Cowen’s offices in China will bring along its industry expertise in new energy, healthcare, and high-tech industries to provide capital market services for the Chinese market including investment banking, alternative investment, and industry research. As Shanghai now is building itself into an international finance center and a science and technology innovation center, CEFC China is able to provide a full suite of services for Chinese companies as they go global and elevate international cooperation to a higher level.
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