Bloomberg
THE INDUSTRIAL & Commercial Bank of China (ICBC) has agreed to pay $600 million (R4.1 billion) for some assets controlled by the Standard Bank Group in Argentina in its biggest takeover in more than three years.
The Chinese bank would pay cash for an 80 percent stake in Standard Bank Argentina, Standard Investments and Inversora Diagonal, it said in a statement to the Hong Kong Stock Exchange on Friday.
The bank and Standard Bank London Holdings plan to jointly invest $100m in Standard Bank Argentina after the transaction is completed.
The deal extends ICBC’s global expansion to South America’s second-largest economy, adding to plans announced earlier this year to open a bank in Brazil and buy a US bank.
ICBC aims to be the first Chinese bank to operate in Argentina, and it would gain 103 branches.
“ICBC’s expansion overseas is in line with the broader trend of Chinese companies tapping into the international market,” said Grace Wu, the head of Hong Kong and China banking research at Daiwa Capital Markets Hong Kong. “It may have more acquisitions in Latin America and Asia.”
Shares of ICBC fell 3.2 percent on Friday amid a global equity rout. They have lost almost 6 percent this year.
The Chinese bank, which acquired a 20 percent stake in Standard Bank for about $5.4bn in March 2008, is the largest shareholder in the local bank.
Standard’s stock dropped 2 percent to R91.69 as at 10.37am on Friday, but closed 0.15 percent up at R93.74.
The sale of the Argentina unit underscores Standard Bank’s reversal in strategy to focus on the African continent, where it has operations in 17 countries. The bank sold its stake in Russia’s Troika Dialog investment bank earlier this year and plans to use the $372m in proceeds to make acquisitions in Africa.
ICBC has announced takeovers and investments valued at $2.1bn since the beginning of 2008, including spending $1.4bn to increase its stake in its Hong Kong unit about a year ago.