CCB announces acquisition of Bank of America (Asia) Ltd

(Xinhua)
Updated: 2006-08-25 09:19

China Construction Bank (CCB) on Thursday inked an agreement with Bank of America (BOA) to acquire 100 percent of equity interest of Bank of America (Asia) limited, the wholly-owned subsidiary of BOA in Hong Kong.

Payable in cash, the total consideration of the acquisition is 9.71 billion HK dollars (about 1.24 billion U.S. dollars), representing nearly 1.32 times of the book net assets of 7.38 billion HK dollars (about 949 million U.S. dollars) of BOC (Asia).

The acquisition is subject to the approvals of the Chinese and overseas authorities and CCB shareholders in a general meeting.

Officials from CCB and BOA said that they expected the acquisition will be completed before the end of 2006.

"Bank of America (Asia) shows little overlapping with CCB business in Hong Kong.

Therefore, it is a very appropriate choice of acquisition for us," said Zhang Jianguo, the newly appointed CCB President.

After the acquisition, the business scale of CCB in Hong Kong will be more than doubled, and the total amount of customer loans will also jump from 16th to the 9th highest in the Hong Kong banking industry, said Fan Yifei, vice president of CCB.

"The acquisition will immediately enhance the per share earnings of CCB," he noted.