Industrial & Commercial Bank of China Ltd. agreed to the first Chinese takeover of a U.S. retail bank, boosting financial ties between the two largest economies as President Hu Jintao concluded a four-day visit.
Bloomberg reports ICBC, the world’s biggest lender by market value, will buy 80% of Bank of East Asia Ltd.’s U.S. unit for $140 million. Both banks are seeking regulatory approval in the U.S. and China for the transaction, according to the statement.
As the news service notes, the acquisition would give Beijing-based ICBC 10 branches in California and three in New York as a platform for growth in the U.S. The deal was one of as many as 60 signed between Chinese and U.S. companies during Hu’s visit as he met with executives from both nations to promote closer economic relations.
“It’s no coincidence that the timing of the announcement of this deal comes while President Hu Jintao is visiting the U.S.,” Mike Werner, a Hong Kong-based senior analyst at Sanford C. Bernstein & Co., told Bloomberg. “From a political standpoint, it will be an interesting development to see if ICBC is granted approval” to buy the assets, he said.
Hu concluded his trip with a signing ceremony in Chicago on Jan. 22. China’s Commerce Minister Chen Deming said that deals worth $25 billion were being reached among U.S. and Chinese companies during the visit, excluding an accord with Boeing Co.