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British bank's massive Korea deal
January 10, 2005 19:55
British bank Standard Chartered has acquired Korea First Bank for $3.3 billion, the largest foreign investment in South Korea's financial industry.
The bank said it would pay for the acquisition by issuing about ¡Ì1 billion in new shares, and through other funding resources.
It added that the deal, which still requires regulatory approval, would contribute to earnings from 2006. It is expected to be finalised by end-April.
The takeover of KFB puts Standard Chartered in competition with US giant Citigroup in the South Korean banking sector.
Standard Chartered's move followed weekend newspaper reports that rival British banking giant HSBC had withdrawn from talks to buy KFB, citing high acquisition costs caused by the rising value of the South Korean currency against the dollar.
KFB is South Korea's seventh largest bank, with a 6% share of a $44 billion market three times larger than Hong Kong's, Standard Chartered said in a statement.