Citi Wins Bid for China Guangdong Bank -Sources
Tue Jan 3, 2006
SHANGHAI/HONG KONG (Reuters) - A Citigroup-led consortium has won the right to buy 85 percent of China's Guangdong Development Bank for $3.2 billion, beating out rival groups led by ABN AMRO and Societe Generale, three sources close to the deal said.
Six officials from the bank regulator, the central bank and the Guangdong provincial government made their decision during a closed-door meeting at Guangdong Bank's headquarters in Guangzhou late on Thursday, a source close to the Chinese bank and a second source close to Citigroup told Reuters on Thursday.
The decision, which awaits final cabinet approval, is set to be announced to bidders in Beijing on Friday, a third source familiar with the situation and based in the capital said.
Citigroup will kick off exclusive negotiations with Guangdong Bank as early as next week on technical areas including staff benefits, IT support and new management, two sources said.
State media have said the Citigroup-led group includes several major state-owned firms, such as China National Cereals, Oils & Foodstuffs Corp. Citigroup (C.N: Quote, Profile, Research) aims to take just 50 percent of Guangdong Bank, with the rest going to domestic investors.
Citigroup declined to comment on Thursday. ABN AMRO and Societe Generale were not immediately available for comment.
That purchase would grant the world's top financial services firm unusually large influence over a single Chinese lender of such size, at a time when local interests complain that foreign firms are acquiring stakes in Chinese banks on the cheap.
The six-person evaluating group comprised two from the central bank, two from the China Banking Regulatory Commission and two from the Guangdong provincial government, both of whom supported Citigroup's bid during the meeting.
Citigroup, ABN AMRO (AAH.AS: Quote, Profile, Research) and Societe Generale (SOGN.PA: Quote, Profile, Research) had been whittled down from 20 candidates, and submitted bids for Guangdong Bank in November. Singapore's DBS Group Holdings (DBSM.SI: Quote, Profile, Research) had also been favored but dropped out of the bidding.
© Reuters 2006. All Rights Reserved.