Deutsche inks deal for 14% of Huaxia
(Shenzhen Daily/Agencies)
Updated: 2005-09-23 10:32

Deutsche Bank signed an initial agreement Wednesday to lead a US$330 million purchase of almost 14 percent of Huaxia Bank, Huaxia sources said, in the first investment by Germany’s biggest lender in a Chinese bank.

Deutsche Bank and another European financial firm would buy 587 million shares in the second-smallest of five domestically listed lenders, paying about 4.50 yuan a share, the sources said, for a 7 percent premium to Wednesday’s closing price.

If finalized, the deal would mark the European firm’s first direct investment into China’s banking industry, after it lost a bid to buy into the Bank of Beijing in March to Dutch rival ING and the World Bank’s International Finance Corp.

A successful deal would also edge out French rival Societe Generale , which banking sources said had long sought to invest in Beijing-based Huaxia.

“After the deal, Deutsche would be one of Huaxia bank’s top three shareholders,” said a Shanghai-based Huaxia executive close to the situation. “In return, Deutsche would get at least two seats on the board,” he added.

Deutsche Bank has been active in investment banking in China and is a qualified foreign institutional investor, able to invest directly in the country’s main stock and debt markets.

But it has so far refrained from making a major investment on the scale of those by HSBC Holdings Plc. and Bank of America Corp.

Close