Bear Stearns To Form Asian Investment Banking Arm

Bear Stearns Cos. plan to form an Asian investment banking venture with a big Chinese securities firm will give the bank needed exposure abroad, but it falls short of some investors' hopes for a bigger investment.

Bear and Citic Securities Co. yesterday said they agreed in principle to invest about $1 billion in each other, develop products for China's investment market, and operate a 50–50 joint venture to offer capital markets services across Asia.

The deal, which requires regulatory approval in China and America, should help Bear Stearns narrow the gap between it and its Wall Street rivals in expanding outside America. Geographic diversification has become an increasingly important for brokerage.