The Industrial and Commercial Bank of China has reached an agreement with the Bank of East Asia on an equity transaction, in which ICBC will acquire a 70% stake in the Canadian subsidiary of BEA for CAD80.25 million.
Under the agreement, ICBC will pay CAD80.25 million, to acquire the 70% stake while BEA will hold the remaining 30% stake. One year after the completion of the transaction, ICBC will have the rights to increase its shareholding in the Canadian subsidiary of BEA to 80%.
In return, ICBC will sell a 75% stake in ICEA Finance Holdings Ltd., a joint venture of ICBC and BEA, to BEA for HKD372 million.
On the completion of the two transactions, ICBC and BEA will jointly operate and manage the Canadian subsidiary of BEA while ICEA will become a wholly-owned subsidiary of BEA.
According to Jiang Jianqing, the chairman of ICBC, the two transactions will create a win-win situation for the two sides. The acquisition of the 70% interest in BEA Canada will enable ICBC to gain a banking business and customer resource in Canada, which will provide a strong platform for further expansion of its businesses and network across North America.
David K.P. Li, the chairman and executive president of BEA, said that they are confident that the two transactions will further enhance their financial services and improve the diversity of their offering in Hong Kong. BEA and ICBC have maintained a good cooperative relationship and the two parties will further develop their partnership in the future and to jointly provide better financial services to customers across the world.