 For a couple of decades, China has been been on the receiving end of an influx of foreign investment and overseas takeovers of its domestic companies. But now, the Chinese government is looking to invest some of its deep-pocketed cash reserves to spread its business tentacles beyond Chinese boundaries. The latest example is via the wholly state-owned China Development Bank, which has agreed to take part in what may be the world's largest banking merger.
The CDB will spend GBP6.6bn for an initial 3.1 per cent of Barclays Bank, which could rise to 8.3 per cent if Barclays succeeds in its bid for Netherlands-based ABN Amro.
Barclays is currently seeking to outbid a consortium led by Royal Bank of Scotland for the Dutch banking and financial services group. "Linking with CDB was seen by Barclays as a move that could enhance its position in this expensive fight," commented the UK's Sunday Telegraph.
Simultaneously, the CDB deal gives the British bank greater connectivity to China's fast-moving banking sector, particularly since Chen Yuan of the CDB will join its board of directors. In addition, Barclays has promised a seat on its board to a representative of Singapore-based Temasek, which is also buying a stake in the company.
Last update : Saturday, 04 August 2007
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