Citigroup Inc, the US' largest banking institution, confirmed on Thursday that a Citigroup-led consortium has been selected to acquire a majority stake in one of China's biggest regional financial institutions, Guangdong Development Bank (GDB, 廣東發展銀行).
The consortium will acquire an 85.6 percent stake in GDB for 24.267 billion yuan, or US$3.06 billion, Citigroup said.
New York-based Citigroup itself will hold a 20 percent stake -- under the 25 percent maximum allowed by Chinese government regulations. International Business Machines Corp, headquartered in Armonk, New York, will have a 4.74 percent share. Meanwhile, two China-based companies -- China Life Insurance Co (
GDB, which is owned by the provincial government, has more than 500 branches and about US$48 billion in assets.
Citigroup had been fighting since last year to buy the Chinese bank and the announcement of the deal signals that it will be able to greatly expand its operations in China. Citigroup currently has branches in just six Chinese cities.
It bested a competing bid from a consortium led by France's Societe Generale AG.
A signing ceremony was held in Guangzhou.
Citigroup said in a statement issued in New York that "this transaction represents the first time a major international financial services company, leading a consortium of co-investors, has been permitted to obtain substantial ownership and assume a significant management role in a Chinese financial institution."
William Rhodes, a senior vice chairman of Citigroup, called it "a tremendous opportunity."
Robert Morse, chief executive of Corporate & Investment Banking for Asia Pacific, called it "a positive outcome for all stakeholders involved, including the Guangdong Government, GDB's management, employees, customers, shareholders and the new investors."
As Beijing gradually opens its banking industry to foreign competition, Chinese banks have sought out international lenders as strategic investors to draw in both money and management skills.
The agreement -- which is still subject to regulatory approval -- allows Citigroup to work with GDB on a daily basis to enhance its management team and corporate governance standards, improve operational and lending practices, upgrade the bank's information technology and further develop customer service.
IBM's stake amounts to a roughly US$170 million investment. IBM hopes that the new connection to GDB leads to lucrative services deals with the bank as it modernizes its technology infrastructure and business practices in coming years.
The deal also reflects the technology company's broader interest in strengthening potential Chinese customers by stimulating the country's overall economy.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College