Luxembourg's oldest bank has struck a deal which sees the largest takeover of a European deposit-taking bank by a Chinese firm.
China's Legend Holdings (Legend) buys a 90 percent stake in Banque Internationale a Luxembourg (BIL) for 1.48 billion euros making it the biggest takeover of a European deposit-taking bank by a Chinese firm to date.
Legend, a Chinese investment holdings company, has subsidiaries in the financial, agriculture and IT sectors. It is best known as the owner of Lenovo, China’s largest personal computer firm.
Stake From Qatar's Royal Family
The company acquired its stake in BIL from Precision Capital, an investment vehicle operated by members of Qatar's royal family, including former Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani.
China has been cracking down on outbound investment in recent months.
Financial Services Not Restricted
In August China's State Council issued new rules codifying the industry areas that would be encouraged, restricted or banned under the new rules, Financial Services though were not included in the restricted list.
Overseas financial institutions, particularly in Europe, have been an attractive target for Chinese acquirers, partly because of their low valuations and as a backdoor into European expansion.
Acquisitive Chinese Buyers
finews.asia reported earlier this year that ultra acquisitive Chinese conglomerate HNA increased its stake in Germany's Deutsche Bank to 9.92 percent just a few months after its first investment in the European banking giant.
Shanghai’s Fosun International paid $185 million for a stake in Banco Comercial Portugues, (BCP) Portugal’s biggest publicly traded lender by assets. After the dilution of BCP's existing capital Fosun became the largest shareholder with its 16.7 percent stake.
Asian Expansion
Founded in 1856 as the oldest private bank in Luxembourg, BIL employs more than 2,000 people worldwide and had some 37.7 billion euros of assets under management at the end of 2016.
«This is an important strategic investment for Legend. Financial services is one of Legend Holdings' key target industries,» said Liu Chuanzhi Legend chairman.
Management Keeps a Stake
BIL's existing management team will stay in place while the Luxembourg government will keep the remaining 9.9 percent of the bank, according to the statement.
Hugues Delcourt, chairman of the management board at BIL, previously served as CEO of ABN Amro Private Banking, Asia & Middle East and will surely be looking to bring BIL back into the Asian region.
