CHINA / Regional
IBM in 'bid for China bank'
(Reuters)
Updated: 2006-11-13 15:37
Hong Kong -- International Business Machines will join a consortium led
by Citigroup that is bidding US$3 billion for control of China's
Guangdong Development Bank, a person familiar with the matter said on
Monday.
A worker cleans a board of a branch of the Guangdong Development Bank in
Zhengzhou, central China's Henan Province, in this file photo taken on
November 6, 2006. [Newsphoto/File]
IBM, the world's largest technology services company, would take a 5
percent stake in the southern China lender if the Citigroup bid is
successful, the source said.
Related readings:
Regulator yet to decide on Citi's bid
Regulator scotches reports of GDB acquisition
Citibank may get 19.9% China bank
Baosteel joins bid for Guangdong bank
Bank shortlists 4 for stake sale
Citigroup and France's Societe Generale have been locked in a takeover
battle that has been drawn out for more than a year, with sources saying
that both sides are bidding about US$3 billion for 85 percent of GDB.
"It is IBM's practice not to comment on rumours or speculation," an IBM
spokesman said in an email, while a Citigroup spokesman in Hong Kong
declined to comment.
Top Citigroup executives including Chief Executive Charles Prince and
former US Treasury Secretary Robert Rubin, now a member of Citigroup's
office of the chairman, are in Hong Kong this week for meetings, sources
said.
China Life Insurance Co., the country's top life insurer, is also a part
of the Citigroup bid, according to sources.
Citigroup is seeking 20 percent of GDB, which is the maximum individual
stake allowed by an overseas owner in a mainland bank under Chinese law,
which also caps total foreign ownership in a domestic lender at 25
percent.
GDB is a top client for IBM, which supplies more than 80 percent of the
lender's IT systems and devices, a technology industry source said on
Monday.
Citigroup last year won preliminary approval to take a stake larger than
20 percent in GDB, but that potentially precedent-setting arrangement was
later knocked down by regulators, re-opening the bidding with SocGen.
The drawn-out proceedings have been marked by recent media reports
declaring Citigroup the winner, but SocGen has denied the stories and
called for greater transparency in the decision.
Citigroup and SocGen are attracted to GDB's more than 500 branches,
rather than the lender's weak financial shape.
Citigroup is also in talks to increase its stake in Shanghai Pudong
Development Bank to 20 percent from less than 5 percent.
A similar stake in GDB would give the world's largest financial services
group a footprint in two of China's richest regions.
Related Stories
� Regulator yet to decide on Citigroup's stake
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� Regulator scotches reports of GDB acquisition
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� Citibank may get 19.9% China bank
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� Baosteel joins bid for Guangdong bank
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� Guangdong bank stake sale earlier next year
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� Guangdong bank shortlists 4 for stake sale
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