Standard Chartered Plc, the UK bank that makes most of its money in Asia, agreed to buy the banking unit of American Express Co for about US$860 million.
Standard Chartered will pay cash equal to the net asset value of American Express Bank Ltd at completion plus US$300 million, the London-based bank said in a statement yesterday.
New York-based American Express is the third-largest credit-card network.
The acquisition will double Standard Chartered's US dollar-clearing business, add about US$22.5 billion of assets under management to the private-banking unit, and includes ``valuable'' branch licenses in India and Taiwan, the UK bank said.
"It looks like a good deal," said Mike Trippitt, a London-based analyst at Oriel Securities Ltd. "They should be able to grow the business quite nicely and it will help lift the private banking side."
Standard Chartered said that it expects to generate a "double-digit" return on investment on the acquisition in 2009, excluding integration costs. Pre-tax cost savings from combining information technology and administration will amount to "well in excess" of US$100 million a year from 2009.
"The acquisition will add capability and scale to two of the group's strategically important businesses," chief executive officer Peter Sands said in the statement.
The acquisition is expected to be completed by the end of March.
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