china-merchants-bank-clinches-wing-lung-deal

China Merchants Bank clinches Wing Lung deal

The Chinese lender agrees to pay 3.1 times book to buy control of Hong Kong-based Wing Lung, valuing the bank at $4.7 billion and triggering a general offer.

Anette Jönsson

June 02, 2008

China Merchants Bank has triumphed in the three-month battle for Hong Kong-listed Wing Lung Bank and has agreed to buy the 53% controlling stake that is held by the Wu family at a price that puts the lenderÆs equity valuation at about $4.7 billion. The deal will trigger a general offer for the rest of the bank.

CMB, which is widely regarded as ChinaÆs most profitable commercial bank, will pay the equivalent of 3.1 times Wing LungÆs book value at the end of March and 2.9 times its value at the end of 2007, according to sources. The deal was signed on Friday, but isnÆt expected to be announced until today, which means the...

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