HSBC plans to take Hang Seng Bank private in US$37 billion deal

The firm, based in London, is known as an anchor of commerce between the Asia-Pacific region and the rest of the world

HSBC Holdings is proposing to acquire the rest of Hang Seng Bank as the Asia exposed lender seeks to cement its presence in its key market of Hong Kong, valuing the target at US$37 billion.

The privatisation price was set at HK$155 a share in cash, a premium of about 30 per cent over the last closing price, HSBC said in a statement on Thursday (Oct 9). The publicly listed shares would be cancelled under the proposal.

“One of HSBC’s strategic priorities is to grow in Hong Kong,” according to its statement. “HSBC intends to continue to respect the legacy of Hang Seng Bank and to serve Hong Kong through both the HSBC and Hang Seng Bank brands.”

HSBC, based in London, currently owns about 63 per cent of Hang Seng Bank, which has been weighed down by a growing pile of real estate bad debt.

HSBC is known as an anchor of commerce between the Asia-Pacific region and the rest of the world. That’s meant it has become highly sensitive to the jostling in trade and geopolitics between Washington and Beijing. BLOOMBERG