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|Tuesday, July 18, 2000, updated at 17:22(GMT+8)|
ICBC Formally Purchases Union Bank of Hong KongThe Industrial and Commercial Bank of China recently revealed that it has completed all legal procedures to purchase Union Bank of Hong Kong Ltd., formally becoming its controlling shareholder. This is the first time a mainland China bank has purchased a publicly owned bank in an international financial center like Hong Kong.
On April 19, 2000, the Industrial and Commercial Bank of China signed a contract with China Merchants Group in Hong Kong to purchase Union Bank of Hong Kong Ltd. for 240 million shares at 7.52 Hong Kong dollars per share. In accordance to Hong Kong regulations on purchasing publicly owned companies, Industrial and Commercial Bank of China offered to unconditionally purchase the shares of minority shareholders at the same price in the end of June. Because the markets reacted favorably to this acquisition, Union Bank of Hong Kong's stock has continued to rise after the purchase agreement was signed and surpassed 7.52 Hong Kong dollars per share in early July. By the time the deal was closed July 14, the price of Union Bank of Hong Kong's stock was trading at 8.70 Hong Kong dollars a share and there were still many investors will to invest. The percentage of minority shareholders of Union Bank of Hong Kong reached nearly 30%, which was more than the legal regulations restricting minority shareholders to holding 25% of the company stock.
In addition to Union Bank of Hong Kong, seven subsidiary companies and one joint venture insurance company (Hong Kong PingAn Insurance Company) was purchased in the deal. The purchase of Union Bank of Hong Kong was approved by the People's Bank of China, State Administration of Foreign Exchange, China Securities Regulatory Commission (CSRC), Hong Kong Monetary Authority and the Securities and Futures Commission of Hong Kong.
According to the legal procedures, Industrial and Commercial Bank of China now has the controlling stake in Union Bank of Hong Kong. Industrial and Commercial Bank of China President Jiang Jianqing will be the chairman and Industrial and Commercial Bank of China Vice President Lee Lihui will be the vice-chairman of the new board of directors.
Industrial and Commercial Bank of China will use Union Bank of Hong Kong's public listing and sales network in Hong Kong to promote the ICBC's wholesale operations, retail operations and investment banking operations.
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