Bank of East Asia said on Thursday it had signed a deal to buy the Taiwan securities arm of American International Group, as the ailing US insurance giant sells assets to raise cash.
“The deal is subject to regulatory approval in Taiwan and we will have an announcement later today,” Chan Kay-cheung, Vice Chairman of Bank of East Asia (China), told Reuters.
The acquisition - which some analysts estimated would be worth $10 million to $20 million - would bring in brokerage and wealth management licenses to the bank, allowing it to tap foreign and Chinese investors’ businesses in Taiwan.
“This is a good deal for Bank of East Asia. It is spending a small amount, but it will be able to do businesses on China’s QDII and QFII in Taiwan,” said an analyst at an European securities house, speaking on condition of anonymity.
Taiwan’s government has approved China’s qualified domestic institutional investors (QDII) to invest in the island’s stock market as part of broader efforts to improve ties with China.
Bank of East Asia, Hong Kong’s fifth-largest lender, is also interested in tapping the wealth management markets in Taiwan, China and Hong Kong, some analysts said. By 0220 GMT, Bank of East Asia’s shares rose 2.5%, tracking a 2.7% gain in the Hang Seng Index. (Reuters)