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Acquisitions
Alibaba’s Jack Ma
In Deal for Reorient
Five investors including Alibaba Chairman Jack Ma agreed to acquire a controlling stake in Hong Kong-listed Reorient Group Ltd. amid growing interest in the city’s brokerages.
According to a Hong Kong stock exchange filing on Thursday, Mr. Ma’s Yunfeng Financial Holdings agreed to buy a 56% stake in Reorient for 2.7 billion Hong Kong dollars (US$348 million) on May 7. The filing didn’t elaborate.
Investment firm Reorient Group has announced the sale of 81% of its enlarged share capital to Yunfeng, in which Mr. Ma owns a 40% stake, and four other investors. Alibaba and Reorient declined to comment.
The deal by Mr. Ma follows other recent purchases by the tech entrepreneur. The Alibaba chairman invested in share sales by Shanghai conglomerate Fosun International Ltd. and China Taiping Insurance Holdings that have raised a combined US$3 billion.
Reorient, which has a market capitalization of HK$4.1 billion, provides securities and brokering services.
Bank of Communications
Chinese Lender Nears
Deal With Banco BBM
China’s Bank of Communications Co. is nearing a deal to buy control of Brazilian lender Banco BBM SA, according to a person familiar with the situation, deepening ties between Brazil and its largest trade partner.
The move by the Shanghai-based lender, one of China’s largest state banks, comes as Chinese banks are boosting their presence in Latin America to support the growing trade and financial flows between the regions. China is a major consumer of Brazilian commodities, particularly soybeans and iron ore. The Bank of Communications deal could potentially be announced to coincide with Chinese premier Li Keqiang’s scheduled visit to Brazil this week.
The deal is likely to be part of a string of tie-ups announced during Mr. Li’s visit. State-owned Industrial & Commercial Bank of China Ltd. plans to start a fund of up to $50 billion, to be managed by Brazil’s state-owned bank Caixa Economica Federal, for investing in infrastructure projects in the South American country, a different person familiar with that situation told The Wall Street Journal earlier.
The Bank of Communications deal would mark a relatively small acquisition for the Chinese bank. Banco BBM had $1 billion in assets and $192 million in shareholder equity as of the end of 2014, according to its website. Citigroup Inc. advised Banco BBM on the sale, the person said.
Banco BBM, which was created in Bahia state more than 100 years ago, is controlled by Brazil’s Mariani family and is the country’s 66th largest bank, in terms of assets, representing 0.05% of total assets of the country’s banking system, according to the central bank. It operates three branches in Brazil and specializes in loans for small and medium companies. Representatives of Bank of Communications and Banco BBM couldn’t immediately be reached for comment.
Although small, the deal reinforces the interest of Chinese players in Brazil’s financial system.
In 2013, China Construction Bank Corp. acquired a controlling stake of midsize Brazilian lender Banco Industrial e Comercial SA, known as BicBanco, for about $716 million.
News of the latest deal comes as China, which for the past few years has replaced the U.S. as Brazil’s main trade partner, deepens its business activity in the country, where Chinese banks are largely absent.
Chinese state-run oil companies, for example, have made a big push into Brazil to secure energy supplies and diversify their investments abroad.
Brazil’s banking system is dominated by five major banks, but there are about 170 small and midsize banks with about 10% of Brazil´s total loans.
Source: http://www.wsj.com/articles/financial-briefs-news-digest-1431901169
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