OCBC offers US$5b for Wing Hang
Print Edition
OVERSEA-CHINESE Banking Corp, the second-biggest bank in Southeast Asia, is set to acquire Wing Hang Bank for HK$38.4 billion (US$5 billion) as it seeks to capitalize on China’s economic growth with a broader funding base.
OCBC will pay HK$125 per share to buy the entire family-owned Wing Hang in cash through its subsidiary, OCBC Pearl Ltd, the Singapore-based lender said in a statement yesterday.
The transaction is still subject to regulatory approvals due in June. It will be the largest takeover of a Hong Kong bank since Development Bank of Singapore, OCBC’s rival, acquired Dao Heng Bank for HK$41.9 billion in April 2001.
“It’s a fair and equitable deal, which recognizes what Wing Hang has built and what we can add to,” Samuel Tsien, group chief executive officer of OCBC, said in Hong Kong yesterday.
“From a prudent capital management perspective, funding of the transaction will be a combination of debt and capital. We have intentions to delist Wing Hang after the deal is completed. And there’s no plan to dispose of any properties that Wing Hang holds,” said Tsien.
The completion of the transaction will raise OCBC’s profit contribution from China to 16 percent from 6 percent, according to the statement.
The deal will boost OCBC’s network on China’s mainland, according to the statement, which is expected to include 31 outlets in 13 cities.
Tsien said the bank has plans to further expand the network on the mainland without giving a number or timetable.
OCBC has also agreed to raise its stake in the Bank of Ningbo to 20 percent from the current 15.3 percent this year.
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