ICBC buys Bank of East Asia in Canada

170 million yuan plus 75% industrial and Commercial Bank of East Asia ICBC on the acquisition of the Economic Observer of East Asian Banks of Canada Ouyangxiao Red Chianghui June 4, ICBC said, with the Bank of East Asia Limited ("Bank of East Asia") on the Canadian Bank of East Asia and Industrial and Commercial East Asia Financial Holdings Limited ("Industrial and commercial east Under the agreement, ICBC will pay the Bank of East Asia $80.25 million (about 73 million US dollars) for the bid, acquiring a 70% per cent stake in the Canadian Bank of East Asia, with the Bank of East Asia holding a 30% per cent stake.　　At the same time, the Bank of East Asia to ICBC acquisition of its own 75% per cent of the industrial and Commercial East Asia, trading on the price of HK $372 million (about 48 million U.S. dollars). Overall, ICBC to 25 million U.S. dollars plus 75% of the industrial and commercial East Asian equity in exchange for the Canadian Bank of East Asia 70% Equity. ICBC sells East Asian banks at a price equivalent to 1.1 times times that of 2008 PB.　　ICBC is the first time in the international merger and acquisition of the customary approach to purchase. Capital expansion in fact, ICBC is not the initiator of the bid.　　As early as April this year, the Hong Kong market was rumored to be the Bank of East Asia to expand the bank's wealth management business, to the ICBC to buy its holdings of the majority of East Asian shares. ICBC said that it is not important who launched, the key is mutual benefit. In terms of internationalization, acquiring the Canadian Bank of East Asia is a higher strategic position than selling East Asian businesses.　　The implication is that ICBC in advance and retreat between the grasp scale just right.　　According to the agreement, after a year of completion of the transaction, ICBC has the option to increase its shareholding to 80%; The Bank of East Asia has the option to sell its remaining shares to ICBC after a year of completion of the deal. The East Asian Bank of Canada and the trade of East Asia are prerequisites.　　After the two deals were completed, ICBC said that the Bank of East Asia would co-operate in the operation and management of the Bank of East Asia, while East Asia would become a wholly owned subsidiary of the Bank. However, the Bank of East Asia Bulletin said that after the sale, the Bank of East Asia will no longer become a subsidiary of the company, its 30% interest will be held by the bank, and ICBC holds 70% of the equity.　　At any time after the completion of the sale, ICBC has the option of acquiring an additional 10% per cent of the Bank of East Asia of Canada, which also has the option of requiring ICBC to buy the remaining shares of the Bank of East Asia, which it holds. In this respect, a ICBC told reporters that there is no contradiction between the arguments. "I believe the Bank of East Asia is not the main shareholder of the Bank of East Asia since the completion of the transaction, and ICBC needs to draw on its mature experience." Then, if the Bank of East Asia is willing to withdraw all of the Bank of East Asia, ICBC will be very happy to take over.　　The final completion of the two transactions will also be subject to the approval of the Ministry of Finance, the China Banking Regulatory Commission, the Hong Kong Monetary Authority, the Hong Kong Securities and Futures Committee, the Canadian Ministry of Finance and the competition authority of Canada's Ministry of Industry. But as the deal is small,It is therefore considered to have very limited financial impact on ICBC. ICBC's Abacus chairman Jiang Jianqing said: "The two deals are a winning option."　　Citic Securities analyst Zhu Yu points out that ICBC is selling industrial and commercial East Asia to integrate licensing resources. ICBC in Hong Kong's original 3 holding subsidiaries, including Industrial Bank Asia, Industrial and commercial East Asia and Business International. ICBC, the former commercial Bank of Asia as a full licence, owns 72.04% of the equity. The two were investment banks, with ICBC holding 72% and 100% respectively.　　ICBC will focus its investment banking operations on wholly-owned industry and Commerce International, so it will be sold to East Asia.　　On the other hand, ICBC's acquisition of 70% per cent of the Bank of Canada will allow it to obtain local banking licences and resources, and further expand North America, especially after the opening of ICBC's New York branch last October, will provide a good platform for the acquisition. "In contrast, the pooling of resources to develop a full licence for the Bank of ICBC international financing more chance."　　"Industry analyst.　　ICBC also revealed that for the industrial and commercial East Asian name, the two sides agreed to retain a period of time, after the industrial and commercial East Asia will be renamed to remove the color of ICBC. "The negotiation process is smooth, pricing is not the point of contention; overall, the interests of both sides outweigh the differences." "No one is more cost-effective, this acquisition is a strategic reciprocity of resource integration, the right thing to do."　　"In this respect, Stanford University senior researcher Dr. Meng Qingxuan bluntly, ICBC internationalization strategy is maturing." He explains that similar pricing acquisitions are common in the capital market operations of international mergers and acquisitions, but it is still a start for China's big banks, and a benchmark for cross-border mergers and acquisitions by domestic financial institutions – the time to take a capitalization approach to cross-border mergers and acquisitions, through the enrichment and consolidation of their strategic assets,　　To the internationalization of reasonable mergers and acquisitions, rather than simple capacity-type acquisitions, such as simple investment set up branch offices. "In the process of internationalization of commercial banks, expansion mode includes business expansion and capitalization expansion, and the capitalization expansion through reorganization is a kind of rational and rapid growth." Meng Qingxuan said, "ICBC's capital expansion method is very clever." "Internationalization roadmap in fact, ICBC's overseas mergers and acquisitions strategy--Choose emerging markets, the industry has long talked about."　　This time the North American takeover was a surprise.　　These people said that their international strategic direction, such as the world's leading emerging markets to taste the financial center, as well as with China's trade closer to the countries and regions, and in view of overseas expansion, the emerging market and mature market simultaneously.　　In this connection, Jiang Jianqing has said that the "expansion of Asia, consolidation of Europe, break the Americas" principle, from the layout of the world, to cover the major international financial centres.　　In fact, every year ICBC will have an internal internationalization of the analysis and discussion program, as well as a number of preferences. "But the decision depends on the opportunity and the conditions of preparation."　　ICBC said. As to whether there will be a similar capitalization of cross-border mergers and acquisitions in future, he admits, inconvenient to comment, because each acquisition of the environment and the status of the subject are different, so take the investment way will be different, is entirely personalized design.　　However, he told reporters, in ICBC's internationalization of mergers and acquisitions and establishment of institutions two ways, at present, it seems that the effect of the establishment of institutions weaker than mergers and acquisitions. Jiang has disclosed that 71% of the assets of ICBC's overseas institutions and 87% of its profits are now realized by its mergers and acquisitions agencies. In ICBC's total assets and profits, the share of offshore business is only 3% to 4%.　　ICBC plans to raise this percentage to around 10% in the future. At present, ICBC's overseas development strategy mainly revolves on the additional organization and the annexation, the reorganization parallel. "As long as we have the right region, the right price and the right opportunity, we will do so as long as it meets our global development strategy," he said. "said Jiang.