Korean Job Discussion Forums

[gmat]

Sept. 3 (Bloomberg) -- HSBC Holdings Plc, Europe's biggest bank, agreed to pay about $6.3 billion for control of Korea Exchange Bank in the company's largest acquisition in Asia.

HSBC will buy 51 percent of Seoul-based Korea Exchange Bank, controlled by U.S. buyout firm Lone Star Funds, the London-based bank said in a statement today. Korea Exchange Bank, the nation's sixth largest lender, has 5.4 million customers, more than 350 branches and operations in 18 countries.

HSBC is set to buy Korea Exchange Bank after U.S. and U.K. rivals spent almost $7 billion on takeovers in Asia's third- biggest economy, which expanded at its fastest pace in almost four years in the second quarter. HSBC Chief Executive Officer Michael Geoghegan agreed on the deal amid rising bad debts from subprime borrowers in the U.S. and slower growth in Europe. ...

HSBC, which last month said it was in talks to buy the stake, agreed to buy 329 million shares of Korea Exchange Bank for about 18,045 won a share in cash, or 24 percent more than the stock's closing price in Seoul today. HSBC will pay $133 million more if the purchase is completed after Jan. 31.

Regulatory Hurdle

The purchase depends on conditions, including regulatory approval, being met by the end of April next year. Lone Star also has the right to terminate the agreement if HSBC doesn't submit an application by Jan. 31 to Korea's financial regulator for approval, according to the statement. HSBC does not intend to make a tender offer to KEB's remaining shareholders.

Hong Young Man, the Korean Financial Supervisory Commission's spokesman, repeated earlier comments that the regulator cannot approve the sale until ``legal uncertainties'' are cleared.

Korean prosecutors allege Dallas-based Lone Star bought Korea Exchange Bank at an artificially low price in 2003 due to a criminal conspiracy, a case that derailed the buyout firm's sale of the stake to Kookmin Bank last year. A final ruling may take at least three years, Lone Star's lawyers said last month.

``This looks impossible at the moment,'' said Ki Ho Jin, who helps manage $1.6 billion at CJ Asset Management Co. in Seoul. ``The deal won't get approved unless the regulator changes its position.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYGt6IsX3aMg&refer=home

[sojourner1]

Yea, I read this close to 2 weeks ago in an English newspaper here. I was surprised to see that and wondered why 51% instead of 49%? Guess there is a huge immediate financial incentive.

KEB will retain it's branding, name, signs, and visual style for the sake of national pride. Seems to be a good bank with a few English speakers and excellent ATM's to use. I must say it seems to be a more hi-tech and complex system than a typical American bank. Maybe it runs with the big boys on Wall Street and I just have never seen that sort of thing.

[gmat]

The 51% stake now is owned by Lone Star.

[Captain Corea]

HSBC needs a larger foothold in the Korean market. The FSS and local banks are doing their all to keep HSBC cornered. This aquisition will give HSBC a lot of freedom for expansion.

(HSBC Korea's CEO just sent out a memo explaining all of this yesterday)

[oxfordstu]

Maybe now they'll begin to issue International bank cards to foreigners

[Thunndarr]

[Hater Depot]

The FSC has been holding up this sale for a while now. They've blocked two other sales of KEB including to a Korean firm, so I wouldn't be holding my breath for this one.