Japan-based Sumitomo Mitsui Banking (SMBC) has signed a deal to increase its holding in Hong Kong’s Bank of East Asia from the current 9.6% to 17.5% in a deal worth $950 million.
The Japanese lender in a statement said it will buy 222 million new Bank of East Asia shares through private placements.
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In December 2012, Sumitomo Mitsui Banking raised its stake to 9.5% from 4.73% by buying 111.57 million new shares.
Spain’s CaixaBank controls 17.05% of the Hong Kong lender and Guoco Group, a conglomerate controlled by Malaysian tycoon Quek Leng Chan, owns a 15% stake.
SMBC said through this deal it aims to boost the alliance with Bank of East Asia and take advantage of its vast network in mainland China.
Sumitomo Mitsui added that it plans to take a seat on the Hong Kong company’s board if the deal receives due regulatory approval.
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