ICBC plans to pay HK$4.5 bln for Macao's Seng Heng Bank

Industrial and Commercial Bank of China<601398><1398>, the largest of China's Big Four commercial bank, announced yesterday that it plans to pay HK$4.5 billion for an 80% stake in Macao's Seng Heng Bank, owned by Stanley Ho, the wealthiest person in the special administrative region (SAR).

According to ICBC's plan, Ho will sell 70% shares held by him and Macao's largest business group Sociedade de Turismo e Diversoes de Macau (STDM), while Seng Heng's director Patrick Huen Wing-ming will sell 9.33% stake. HK$3.86 billion, or 85% of the consideration, will be paid in cash once the acquisition is completed, while the remainder, HK$682 million, will be held in an escrow account for six months.

The plan needs to be voted by ICBC's shareholders before it gets the official approval from China Banking Regulatory Commission (CBRC) and the Monetary Authority of Macao SAR.

The transaction will depend on official nods from both the Monetary Authority of Macao and the China Banking Regulatory Commission. ICBC shareholders also need to approve the deal. All these conditions must be satisfied by March 26 next year.

As the third largest lender in Macao, Seng Heng operates nine branches in the region and its assets reached HK$24 billion in 2006.

The possible acquisition would give the bank "a leading market position and scale in the Macao banking sector and also access to a large customer base," according to an ICBC's top executive.

ICBC shares closed yesterday at HK$4.86, down 1.22%.