皇冠体育app

UBS acquires US$500m stake in BOC
(AFP)
Updated: 2005-09-27 15:52

UBS, Switzerland's largest bank, said it was acquiring a 500-million-dollar stake in Bank of 皇冠体育app (BOC), 皇冠体育app's second-biggest bank, as part of a strategic partnership between the two banks.

The two are forming a mutually beneficial strategic cooperation covering the development of investment banking and securities products and services in 皇冠体育app and for Chinese clients.

The deal is subject to Chinese regulatory approval.

A spokesman said Tuesday UBS expected the deal to close by the end of 2005.

Following the deal, UBS's stake in BOC will be around 1.6 percent.

The announcement came ahead of BOC's planned initial public offering (IPO) next year, for which UBS is lead manager.

Royal Bank of Scotland, Merrill Lynch and the Li Ka-shing Foundation agreed earlier this year to acquire 10 percent in BOC for a combined 3.1 billion dollars.

UBS said in June that it was in talks with BOC and that it might invest up to 500 million dollars.

The cooperation and investment will "cement the long-standing relationship between Bank of 皇冠体育app and UBS", the Swiss bank said in a statement.

They will be preferred partners in various investment banking and related securities business areas in 皇冠体育app and for Chinese clients, and in addition will cooperate in operational matters relating to these business areas.

"We regard this agreement as a natural development of our long-term relationship with Bank of 皇冠体育app. The combination of Bank of 皇冠体育app's brand, distribution and customer base with UBS's products, services and experience will be powerful," UBS said.

The investment is part of UBS's strategic approach of pursuing a number of ventures in the 皇冠体育app markets aiming to capture growth potential, it added.

Swiss rival Credit Suisse, meanwhile, was reported to be eyeing a 500-million-dollar stake in 皇冠体育app Construction Bank.

UBS's announcement of the BOC investment followed reports in Hong Kong that the Swiss bank was also poised to announce around a 1.7-billion-yuan (210,061-million-dollar) investment in the Beijing Securities.

UBS declined to comment on those reports.

If confirmed, the investment in Beijing Securities would be the first foreign investment in a Chinese mainland brokerage.

The cash would help bail out the Chinese firm, which had debts of 160 million yuan last year, in return for a 20 percent stake in the business and a level of management unheard of among foreign investors in 皇冠体育app.

Any deal would be seen as a gauge of 皇冠体育app's willingness to open up its brokerages to foreign investment, the reports added.

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