China buys into S Africa's biggest lender
A major Chinese bank said Tuesday it has bought a 20 percent stake in South Africa's largest lender for US$4.75 billion (euro3.1 billion), sharply expanding China's financial presence in Africa.
By Agencies |
BEIJING: A major Chinese bank said Tuesday it has bought a 20 percent stake in South Africa's largest lender for US$4.75 billion (euro3.1 billion), sharply expanding China's financial presence in Africa.
The deal is one of China's biggest foreign corporate acquisitions to date. It comes as Beijing tries to build ties with Africa in search of resources and markets for its booming economy.
Industrial and Commercial Bank of China Ltd.'s investment in Standard Bank was completed Monday after receiving regulatory approval in both countries, state-owned ICBC said in a statement issued through the Hong Kong stock exchange.
The deal, first announced October, gives ICBC a platform and an experienced partner to help it expand in Africa, an unfamiliar territory for Chinese lenders.
ICBC, China's biggest bank, and Standard Bank Group Ltd. said earlier that each would serve the other's clients and support its international expansion plans. They have given no details of possible joint activities.
Standard Bank, headquartered in Johannesburg, operates in 38 countries, most of them in Africa, and says it has assets of US$119 billion (euro83 billion).
The deal makes ICBC the biggest shareholder in Standard Bank. ICBC, based in Beijing, says it has 1.1 trillion yuan (US$144 billion; euro100 billion) in assets and reported profits in 2006 of 49.3 billion yuan (US$6.4 billion; euro4.8 billion).
Beijing is encouraging Chinese companies to invest abroad in what it calls a ``go global'' strategy to diversify the economy and take advantage of international opportunities.
It has made special efforts to develop ties with Africa as a potential source of energy, raw materials and markets.
China's banks are growing rapidly amid an export-fueled economic boom and are extending their operations abroad to serve Chinese clients and win international business.
ICBC's decision in South Africa to take a minority stake instead of acquiring a bank outright was in line with a Chinese strategy of trying to avoid possible political frictions over buying assets abroad.
Chinese companies have been skittish about acquisitions since the uproar in 2005 over state-owned oil company CNOOC Ltd.'s attempt to buy U.S. oil and gas producer Unocal Corp. CNOOC dropped its bid after American critics said it might endanger energy security.
The deal is one of China's biggest foreign corporate acquisitions to date. It comes as Beijing tries to build ties with Africa in search of resources and markets for its booming economy.
Industrial and Commercial Bank of China Ltd.'s investment in Standard Bank was completed Monday after receiving regulatory approval in both countries, state-owned ICBC said in a statement issued through the Hong Kong stock exchange.
The deal, first announced October, gives ICBC a platform and an experienced partner to help it expand in Africa, an unfamiliar territory for Chinese lenders.
ICBC, China's biggest bank, and Standard Bank Group Ltd. said earlier that each would serve the other's clients and support its international expansion plans. They have given no details of possible joint activities.
Standard Bank, headquartered in Johannesburg, operates in 38 countries, most of them in Africa, and says it has assets of US$119 billion (euro83 billion).
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The deal makes ICBC the biggest shareholder in Standard Bank. ICBC, based in Beijing, says it has 1.1 trillion yuan (US$144 billion; euro100 billion) in assets and reported profits in 2006 of 49.3 billion yuan (US$6.4 billion; euro4.8 billion).
Beijing is encouraging Chinese companies to invest abroad in what it calls a ``go global'' strategy to diversify the economy and take advantage of international opportunities.
It has made special efforts to develop ties with Africa as a potential source of energy, raw materials and markets.
China's banks are growing rapidly amid an export-fueled economic boom and are extending their operations abroad to serve Chinese clients and win international business.
ADVERTISEMENT
ICBC's decision in South Africa to take a minority stake instead of acquiring a bank outright was in line with a Chinese strategy of trying to avoid possible political frictions over buying assets abroad.
Chinese companies have been skittish about acquisitions since the uproar in 2005 over state-owned oil company CNOOC Ltd.'s attempt to buy U.S. oil and gas producer Unocal Corp. CNOOC dropped its bid after American critics said it might endanger energy security.
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