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No nod forces BOC to axe deal
By Zhang Fengming |
April 3, 2009, Friday
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Print Edition
Print Edition
The Bank of China has scrapped a 236-million-euro (US$313 million) investment in La Compagnie Financiere Edmond De Rothschild as the Chinese government has not given its approval, the bank said yesterday.
"The agreement has expired and has automatically become invalid as we are unable to gain the government approval before a second deadline," Wang Zhaowen, a spokesman of the Beijing-based bank, said in a telephone interview from Beijing yesterday.
"We may in the future seek cooperation in other areas with the French firm," Wang said, declining to give more details.
He also noted this failure won't deter BOC from future overseas acquisitions. He said the bank has no more details to disclose at the stage.
The bank, the world's third-largest by market value, announced the deal in September. However, it was forced to extend an original December 31 deadline by three months but it still failed to get government approval.
The Chinese bank had agreed to purchase a 20-percent stake in the Paris-based asset manager. BOC President Li Lihui on March 24 said he expected to get a response from the government on the Rothschild purchase "very soon."
Chinese authorities are tightening scrutiny on financial institutions' overseas acquisitions. Cai Esheng, vice chairman of the China Banking Regulatory Commission, in December said Chinese lenders should adopt a "cautious" stance toward overseas acquisitions.
"The agreement has expired and has automatically become invalid as we are unable to gain the government approval before a second deadline," Wang Zhaowen, a spokesman of the Beijing-based bank, said in a telephone interview from Beijing yesterday.
"We may in the future seek cooperation in other areas with the French firm," Wang said, declining to give more details.
He also noted this failure won't deter BOC from future overseas acquisitions. He said the bank has no more details to disclose at the stage.
The bank, the world's third-largest by market value, announced the deal in September. However, it was forced to extend an original December 31 deadline by three months but it still failed to get government approval.
The Chinese bank had agreed to purchase a 20-percent stake in the Paris-based asset manager. BOC President Li Lihui on March 24 said he expected to get a response from the government on the Rothschild purchase "very soon."
Chinese authorities are tightening scrutiny on financial institutions' overseas acquisitions. Cai Esheng, vice chairman of the China Banking Regulatory Commission, in December said Chinese lenders should adopt a "cautious" stance toward overseas acquisitions.
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