Geely in US$300m deal to control Saxo Bank
Chinese carmaker raising stake to above 50% in Denmark’s firm
COPENHAGEN: Chinese carmaker Zhejiang Geely Holding Group will increase its stake in Denmark’s Saxo Bank to above 50% in a US$300mil-plus deal that highlights China’s drive to tap the expertise of European financial firms.
Beijing has generally been trying to slow the pace of overseas investments by Chinese companies, worried about capital outflows. But there are signs the authorities are still supportive of investments in foreign financial firms, particularly to access new technologies.
Last month, Legend Holdings, which owns computer maker Lenovo, bought Banque Internationale a Luxembourg (BIL) for 1.48 billion euros (US$1.76bil).
Also last month, sources familiar with the matter said two of China’s most acquisitive conglomerates, HNA Group and Anbang Insurance Group, had separately considered bidding for the German insurer Allianz SE.
Geely said in May it would take a 30% stake in Saxo Bank as part of a diversification drive. It is the first major investment into financial services for the Chinese company that owns Swedish carmaker Volvo.
Despite its name, Saxo Bank derives most of its income from its online trading platforms for private foreign exchange traders and others, rather than traditional banking.
“Saxo Bank is an attractive investment for Geely because the bank, as a fintech (financial technology) and regtech (regulatory technology) company, has always had its main focus on technology,” a Geely spokesman said in an e-mail to Reuters.
He said Geely believed Saxo Bank’s technologies and product value could be expanded across Asia.
Finland’s Sampo Oyj also said yesterday it would buy a 19.9% stake in Saxo Bank for 265 million euros (US$311mil).
A spokesman for Saxo Bank told Reuters that Geely would buy its shares under the same terms as Sampo. Geely’s spokesman said the Chinese company would not comment on the price paid.
Current Saxo Bank shareholders TPG Capital and SinarMas had accepted the offers from Geely and Sampo and would sell their stakes of 29.26% and 9.9% respec- tively, Saxo said.
Saxo’s chief executive Kim Fournais, who founded the company with Lars Seier Christensen and Marc Hauschildt in 1992, will keep his 25.71% stake. Christensen agreed in May to sell his shares to Geely.
Saxo Bank has 1,600 employees in 18 countries and made operating revenue of 2.9 billion Danish crowns (US$457.46mil) last year. Geely has over 60,000 employees across the world.