KandN Kenanga Holdings Bhd, the Malaysian brokerage backed by Deutsche Bank AG, is close to an agreement to buy the investment banking and broking unit of ECM Libra Financial Group Bhd for about RM900 million, according to three people familiar with the matter.

Kenanga may pay in cash and stock, two of the people said today, declining to be identified as the information is private. The sale won't include ECM Libra's asset management operations, they said.

Malaysian banks and brokerages have been merging amid increased competition from foreign lenders including Bank of China Ltd and Sumitomo Mitsui Banking Corp. Hong Leong Bank Bhd acquired EON Capital Bhd for US$1.7 billion in May, while RHB Capital Bhd is seeking central bank approval to buy OSK Holdings Bhd's investment bank.

Kenanga's head of group corporate affairs Siti Maslinda Sheikh Othman wasn't immediately available to comment. ECM Libra spokeswoman Maureen Jeyasooriar declined to comment on the sale. Kenanga's board is expected to meet later today to approve the deal, one person said.

The sale will help Azman Hashim, ECM Libra's biggest shareholder, meet Malaysian licensing rules that bar a single individual from being a key owner of more than one investment bank. Azman, who owns 24 per cent of ECM Libra, also indirectly holds almost 17 per cent of AMMB Holdings Bhd, Malaysia's fifth- biggest lender by market value, according to data compiled by Bloomberg. -- Bloomberg