(Bloomberg) -- UBS Group AG has agreed to sell the majority of its stake in Credit Suisse’s China venture to a Beijing-backed fund, dealing a blow to the ambitions of Ken Griffin’s Citadel Securities to expand in the world’s second-largest economy. 

Under the deal, which values the money-losing business at $253.4 million, the Swiss lender will sell a 36.01% holding in Credit Suisse Securities (China) Ltd. for $91.4 million to Beijing State-owned Assets Management Co.. Founder Securities Co., Ltd. will dispose of its entire 49% stake in the venture for $124 million. 

That gives the Beijing firm an 85.01% majority stake, according to a statement. UBS will retain 15% after the sale, confirming an earlier report by Bloomberg News.

The announcement brings the months-long rivalry for Credit Suisse’s investment bank in China to an end, in which Citadel Securities had bid for the firm to help it build a local platform for its market-making capabilities. The sale is a consequence of UBS’s acquisition of its Swiss rival in an emergency rescue last year, which left it with two domestic brokerages in the country. 

“We have had a longstanding presence on the mainland for 35 years and we will continue to expand in this important market,” UBS Chief Executive Officer Sergio Ermotti said in the statement. 

Before it collapsed last year, Credit Suisse had offered to buy out Founder’s 49% stake, valuing the entire firm at about 2.3 billion yuan ($334 million at that time). 

A representative for Citadel Securities declined to comment on the Credit Suisse unit sale when contacted by Bloomberg. 

The firm has been seeking to expand its presence in China with a broader footprint spanning brokerage execution, financial advisory, market-making and asset management under a securities platform, a person familiar said in April. The firm will continue to look for other acquisition opportunities or apply for its own licenses, one of the people said earlier.

(Updates with Citadel Securities’ decline to comment in 7th paragraph)

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