StanChart to buy American Express Bank
Standard Chartered Plc has agreed to acquire US-based American Express Bank (AEB) from American Express Company (Amex) for about 860 million dollars in cash – a deal that would give the Stanchart additional branch licences in India. Standard Chartered will pay cash equal to the net asset value of American Express Bank plus $300 million. American Express Company is the third-largest credit card company in the world.
The acquisition, which is subject to certain conditions, including regulatory consents, is expected to be completed in the first quarter of 2008. StanChart said that AEB provides it with an opportunity to add capability, scale and momentum in the strategically important financial institutions and private bank businesses. Among other benefits, "the acquisition will include valuable branch licences in India and Taiwan subject to regulatory approvals," it said.
AEB's provides about 1,700 banks in 120 countries with clearing services in U.S. dollars, euros and Japanese yen. Its private bank services to over 10,000 customers with total assets under management of around 22.5 billion dollar as at December 31, 2006. About 60 percent of American Express Bank's assets come from regions where Standard Chartered is already presen The acquisition will double Standard Chartered's U.S. dollar-clearing business.
Standard Chartered is the largest foreign bank in India in terms of branches with a total of 81 branches, as against American Express Bank's seven branches as of September 2006 out of total 258 branches of 29 foreign banks. Once RBI gives its approval, StanChart will have 90 branches in India — ahead of HSBC with 47 branches. StanChart will also get two branches in Taiwan and one in Singapore, where there are restrictions on branch licences.
However, the deal does not include the travel and card business of Amex, or even its international financial services businesses. In India, Amex has already applied for a non-banking finance company (NBFC) licence, to which it will transfer the existing credit card and travel-related services.
Consolidation in Indian banking sector to gain prominence...Click here
State Bank of Saurashtra to merge with State Bank of India ...Full story
India Inc prefer North America and Asia for Global Acquisitions... Click here
M&A by Indian Cos at Foreign Turf valued at US$11.37 bn... Click here
Cross-border banking consolidation continues... Click here
Read about M&A in Indian Banking Industry ... Click here