Jack Ma-Backed Ant Outbids Citadel Securities for Credit Suisse’s China JV

(Bloomberg) -- Ant Group Co. outbid Citadel Securities LLC for Credit Suisse’s investment bank venture in China, in a surprise move that will be subject to close regulatory scrutiny, people familiar with the matter said.

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The bid by Jack Ma-backed fintech giant to build a securities business using Credit Suisse’s operations will face a thorough review because China favors a foreign buyer, the people said. The investment banking and brokerage license was originally awarded to the Swiss bank to help open the financial sector to global competition, one of the people said, asking not to be identified discussing private matters.

That preference poses a dilemma for UBS Group AG, which now owns Credit Suisse. For now, the bank will have to choose between the higher local bid from Ant, or the lower Citadel offer that’s more likely to win government approval, the people said. The negotiations are ongoing and other bidders may still join the fray, one of the people said.

Representatives for UBS and Ant declined to comment.

UBS is struggling to attract interest in the unit from global firms because of escalating geopolitical tensions, a crackdown on bank data flows and the struggling economy. The bank faces a difficult balancing act because the venture’s Chinese partner, Founder Securities, may reject the lower offer from Citadel, delaying the sale process, the people said.

Citadel Securities, founded by billionaire Ken Griffin,