China Merchants Bank Co, set to acquire Hong Kong's Wing Lung Bank Ltd in a US$4.66-billion deal, said it was confident it would secure regulatory approvals after extending the completion deadline.
"We are still in the midst of getting regulatory approvals," Lan Qi, board secretary of Shenzhen-based China Merchants, told Bloomberg News yesterday. "We haven't encountered any snag in that process."
China Merchants, the nation's fifth-largest lender by market value, agreed June 2 to buy 53.1 percent of Hong Kong-based Wing Lung for HK$19.3 billion (US$ 2.5 billion), the most expensive bank acquisition in Hong Kong since 2001. It was also required to make a general offer for the rest of the company.
The two companies said they would push the completion deadline to September 14 from Friday to meet regulatory requirements. They said they may extend the deadline further if they failed to meet the conditions by September 14.
China Merchants said on June 12 it planned to raise as much as 30 billion yuan (US$4.4 billion) to bolster capital after the acquisition. China Merchants's capital adequacy ratio, a key measure of financial strength, would drop to 6.7 percent after deducting goodwill for the Wing Lung purchase, from 10.7 percent at the end of last year, according to a Goldman Sachs Group Inc estimate.
(Shanghai Daily August 14, 2008)
