Under the deal, Industrial & Commercial Bank of China Ltd., by some measures the world's largest bank, agreed to acquire a majority stake in Bank of East Asia Ltd.'s U.S. subsidiary. ICBC will pay $140 million for an 80% stake. Bank of East Asia, which is a publicly traded company based in Hong Kong, has a total of 13 branches in New York and California. ICBC and Bank of East Asia have talked to U.S. regulators about the deal, these people said. So far, most Chinese investments in the U.S. financial sector have involved the Chinese taking passive, minority stakes in firms such as Blackstone Group LP and Morgan Stanley. Taking a majority stake in Bank of East Asia is a change of tactic for ICBC In a speech at the event Friday, Chen Deming, China's Commerce Minister, said one of the priorities for the Commerce Ministry is to "encourage our companies to go out." He pointed to the vast foreign-exchange reserves held by China, saying that "we should turn those reserves into capital and assets." Otherwise, the reserves could decline in value because of inflation, Mr. Chen said. The move by ICBC underscores the desire by Chinese banking executives to transform their strength into a greater presence globally, as Chinese banks have emerged from the global financial crisis largely unscathed. http://online.wsj.com/article/SB100...28880.html?mod=WSJ_hp_LEFTWhatsNewsCollection
When foreign investors get excited about foreign assets, be afraid.....and bearish on the newly acquired assets! :eek: