Citic Securities is set to buy Crédit Agricole’s Hong Kong-based brokerage for $1.25 billion, in what would be the first acquisition of a foreign securities player by a Chinese firm.

The deal sees Citic take a near 20 per cent stake in CLSA for $310 million in cash with a follow on agreement for the Chinese group to buy the remaining 80 per cent for $941 million, subject to the approval of regulators and CLSA staff, according to a report in the Financial Times.

For Citic the deal will bring a vastly improved distribution network through which to sell equity and raise capital overseas for its Chinese clients.

The two sides first began discussing a combination of their businesses in March 2010 and have gone on to launch a number of partnership initiatives since then. A deal for Citic to take over CLSA had been expected to be concluded earlier this year.