Fo­sun buys into Por­tuguese bank

China Daily (USA) - - BUSINESS - By LI XIANG lix­i­ang@chi­nadaily.com.cn

Chi­nese con­glom­er­ate Fo­sun In­ter­na­tional Ltd has ac­quired nearly 17 per­cent of Mil­len­nium BCP, be­com­ing the largest share­holder in Por­tu­gal’s largest listed lender by as­set and fur­ther ex­tend­ing the group’s busi­ness in Europe and Africa.

The deal is the lat­est move by Fo­sun, one of China’s most ac­quis­i­tive groups owned by Chi­nese ty­coon Guo Guangchang, af­ter ac­quir­ing a slew of high-pro­file over­seas as­sets in­clud­ing French re­sort op­er­a­tor Club Med, Por­tu­gal’s largest in­surer Fidel­i­dade and Canada’s cir­cus and en­ter­tain­ment gi­ant Cirque du Soleil.

Mil­len­nium BCP said in a state­ment on Sun­day that the Por­tuguese reg­u­la­tor had ap­proved the of­fer by Fo­sun to ac­quire its 16.7 per­cent stake for 175 mil­lion euros ($185.5 mil­lion).

Fo­sun said in a fil­ing to the Hong Kong Stock Ex­change that the deal will help it ex­tend its busi­ness in Europe and Africa. It also con­firmed the plan to in­crease its stake to 30 per­cent in the near fu­ture.

The deal will strengthen Fo­sun’s fi­nan­cial ca­pa­bil­ity in in­ter­na­tional com­mer­cial bank­ing, in­vest­ment bank­ing and pri­vate bank­ing sec­tors and will help it gain ac­cess to fi­nan­cial markets in Poland, Mozam­bique, An­gola and Switzer­land, the com­pany said in the fil­ing.

The trans­ac­tion was made through a pri­vate place­ment of Mil­len­nium BCP’s new shares to Fo­sun at a price 1.1089 euros per share, an 11 per­cent dis­count on Fri­day’s clos­ing price.

The share di­lu­tion made Fo­sun the biggest share­holder in the Por­tuguese lender, sur­pass­ing An­golan state oil com­pany So­nan­gol, which owned a 17.84 per­cent stake be­fore Fo­sun’s ac­qui­si­tion.

Fo­sun’s in­vest­ment is ex­pected to boost the cap­i­tal po­si­tion and im­prove the prof­itabil­ity of Mil­len­nium BCP as the Por­tuguese fi­nan­cial sec­tor has un­der­gone a ma­jor trans­for­ma­tion since the out­break of the global fi­nan­cial cri­sis in 2008, and fi­nan­cial in­sti­tu­tions have been un­der pres­sure to spin off debts and bad loans.

The deal also high­lighted the con­tin­u­ous in­ter­est of Chi­nese cash-rich com­pa­nies in Euro­pean as­sets, in­dus­try an­a­lysts said.

Europe re­mains the most at­trac­tive re­gion for Chi­nese buy­ers with to­tal of $73.8 bil­lion of ac­tiv­i­ties tak­ing place across 120 deals in the first three quar­ters of this year, a 138.8 per­cent jump com­pared to the same pe­riod in 2015, M&A data provider Merg­er­mar­ket said in a re­port.

But the trend could slow in the fourth quar­ter as the Chi­nese au­thor­i­ties are concerned about cap­i­tal out­flow through fake trade deals, the re­port said.

value of the deal be­tween Fo­sun and Mil­len­nium BCP

REUTERS

A woman walks past the of­fice of Por­tuguese bank Mil­len­nium in Lis­bon, Por­tu­gal.

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