China's state-run China Construc-tion Bank (CCB, 中國建設銀行) has begun talks on a deal to take up to a one-fifth stake in US investment bank Bear Stearns, a report said yesterday.
The move, which would make the Chinese lender the US bank's largest single shareholder, is designed to give Bear Stearns access to the growing but difficult Chinese market through a tie-up with a local financial institution.
Although no deal was imminent, the Financial Times said the talks were likely to raise concerns in the US as they had the potential to see for the first time Chinese interests becoming a significant shareholder in a major Wall Street player.
The newspaper, citing "people familiar with the matter," said the two sides were discussing how a deal would work.
It said one possibility would see the Chinese bank buying convertible bonds in Bear Stearns that could later be turned into a 20 percent equity stake.
The deal would also give CCB a seat on the US bank's board, the report added.
The Wall Street Journal in a similar report said the deal could be worth as much as US$4 billion.
If such a deal were to go ahead it would make it the largest Chinese investment in a US company since Beijing-based computer group Lenovo (
The prospect of a Chinese firm buying into a reputable Wall Street firm could again make regulators nervous, just like when China National Petroleum Offshore Oil Corp (CNOOC,
It also comes as Chinese President Hu Jintao (
Nevertheless a potential agreement between the banks may not spark the same level of concern on Capitol Hill given that Bear Stearns was a smaller Wall Street firm, one analyst said.
"If there were a deal it would be a major investment and not a controlling stake," Chen Xingdong (
"As long as there were no misunderstanding between both sides then I think the possibility is there," said Chen, adding that neither could the US afford to be seen as overly protectionist of domestic assets.
Meanwhile, a spokesman at the Chinese bank headquarters in Bei-jing denied the talks were taking place.
"We have confirmed that no such plan is underway," he said.
Bear Stearns in Hong Kong refused to comment.
Super Typhoon Kong-rey is the largest cyclone to impact Taiwan in 27 years, the Central Weather Administration (CWA) said today. Kong-rey’s radius of maximum wind (RMW) — the distance between the center of a cyclone and its band of strongest winds — has expanded to 320km, CWA forecaster Chang Chun-yao (張竣堯) said. The last time a typhoon of comparable strength with an RMW larger than 300km made landfall in Taiwan was Typhoon Herb in 1996, he said. Herb made landfall between Keelung and Suao (蘇澳) in Yilan County with an RMW of 350km, Chang said. The weather station in Alishan (阿里山) recorded 1.09m of
NO WORK, CLASS: President William Lai urged people in the eastern, southern and northern parts of the country to be on alert, with Typhoon Kong-rey approaching Typhoon Kong-rey is expected to make landfall on Taiwan’s east coast today, with work and classes canceled nationwide. Packing gusts of nearly 300kph, the storm yesterday intensified into a typhoon and was expected to gain even more strength before hitting Taitung County, the US Navy’s Joint Typhoon Warning Center said. The storm is forecast to cross Taiwan’s south, enter the Taiwan Strait and head toward China, the Central Weather Administration (CWA) said. The CWA labeled the storm a “strong typhoon,” the most powerful on its scale. Up to 1.2m of rainfall was expected in mountainous areas of eastern Taiwan and destructive winds are likely
The Central Weather Administration (CWA) yesterday at 5:30pm issued a sea warning for Typhoon Kong-rey as the storm drew closer to the east coast. As of 8pm yesterday, the storm was 670km southeast of Oluanpi (鵝鑾鼻) and traveling northwest at 12kph to 16kph. It was packing maximum sustained winds of 162kph and gusts of up to 198kph, the CWA said. A land warning might be issued this morning for the storm, which is expected to have the strongest impact on Taiwan from tonight to early Friday morning, the agency said. Orchid Island (Lanyu, 蘭嶼) and Green Island (綠島) canceled classes and work
KONG-REY: A woman was killed in a vehicle hit by a tree, while 205 people were injured as the storm moved across the nation and entered the Taiwan Strait Typhoon Kong-rey slammed into Taiwan yesterday as one of the biggest storms to hit the nation in decades, whipping up 10m waves, triggering floods and claiming at least one life. Kong-rey made landfall in Taitung County’s Chenggong Township (成功) at 1:40pm, the Central Weather Administration (CWA) said. The typhoon — the first in Taiwan’s history to make landfall after mid-October — was moving north-northwest at 21kph when it hit land, CWA data showed. The fast-moving storm was packing maximum sustained winds of 184kph, with gusts of up to 227kph, CWA data showed. It was the same strength as Typhoon Gaemi, which was the most