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Fri, Mar 27, 2009 - Page 10 News List

Goldman to keep most of ICBC stake


US investment giant Goldman Sachs said on Wednesday it would keep most of its stake in the Industrial and Commercial Bank of China (ICBC, 中國工商銀行), the Chinese banking titan, at least through April next year.

New York-based Goldman Sachs, which holds a stake of 4.93 percent in the world’s biggest bank by market value, said in a statement it would keep at least 80 percent of its ICBC through April 28 next year.

The US firm acquired the stake in 2006 when China’s largest lender completed a record initial public offering. At the time, a Goldman Sachs-led consortium of Allianz Capital and American Express bought a 10 percent stake for US$3.78 billion in the bank.

A statement by ICBC and Goldman Sachs “reaffirmed that they will continue their collaborative efforts” under a January 2006 agreement.

“Today’s announcement underscores our firm’s confidence in ICBC and our commitment to China,” Goldman Sachs chairman and chief executive Lloyd Blankfein said.

“We look forward to working closely with ICBC, one of the most important financial institutions in the world, and further developing our strategic cooperation.”

ICBC chairman Jiang Jianqing (姜建清) said in the statement: “We are delighted that Goldman Sachs will remain a major strategic investor in ICBC. Our relationship over the past three years has proven very successful and we look forward to continued close cooperation between our two firms.”

Under the so-called lock-up deal, the ICBC shares held by Goldman Sachs would have to become free to be sold in equal installments next year on April 28 and Oct. 20.

Under the new lock-up deal, Goldman Sachs agreed not to sell 80 percent of its ICBC shares at any time prior to April next year.

Some reports have said Goldman, looking for cash to repay the US government for its capital injection, might sell part of its ICBC stake.

In a separate statement, American Express said that “depending on market conditions, the company may sell its ICBC shareholding at some point after the lock-up period and will explore all potential methods of sale that would maximize value and minimize market impact, with a preference for a private sale to investors.”

AmEx and ICBC “reaffirmed their strategic cooperative relationship,” a joint statement from Beijing said.

AmEx, whose stake amounts to 0.38 percent of ICBC shares, also has a right to the stake in two equal installments next year on April 28 and Oct. 20.

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