Surpassing the HSBC/Bank of Communications deal as the biggest foreign investment in a single Chinese bank, Bank of American (BofA) agreed to pay about US$2.5bn for a 9% stake in China Construction Bank (CCB), China's third-largest lender, and to buy another US$500m in shares when CCB launches its upcoming IPO. Asia Financial Holdings, a unit of Singapore's state-owned investment company Temasek Holdings, also signed an agreement with CCB to invest US$1bn in the overseas IPO, giving Temasek a 5.1% stake in the Chinese lender.
Following the announcement of the BofA deal and news that Citigroup had been stripped of its underwriting role in CCB's US$5bn listing after reneging on its promise to invest in CCB, a spate of pending deals are now in the pipeline. UBS is negotiating to buy a stake in Bank of China, the country's third-largest lender, enhancing the Swiss group's chances of winning a key advisory role in BoC's US$3-4bn overseas listing, according to a Financial Times report.
Goldman Sachs and Allianz of Germany are also in talks to buy a US$1bn stake in the Industrial and Commercial Bank of China (ICBC), China's largest and most troubled state-owned bank. Meanwhile, Guangdong Development Bank, southern China's biggest lender, hired Deutsche Bank to help find a foreign buyer for a stake in the company before its US$700m IPO next year.