HSBC renegotiates Korean Exchange Bank acquisition

by Gill Montia

Story link: HSBC renegotiates Korean Exchange Bank acquisition

HSBC is reported to be renegotiating the price of its proposed acquisition of a majority stake in Korea Exchange Bank (KEB), from US private equity firm, Lone Star.

Europe’s biggest bank began the lengthy negotiations with Lone Star last year, after two failed attempts to make acquisitions in Korea’s fast-growing financial services market.

The bank remains focused on its emerging markets business and a 51% stake in KEB would give it a significant presence in Asia’s fourth biggest economy.

The proposed transaction has been bogged down in legal and regulatory issues for some months and the $6 billion price is up for review because shares in KEB have fallen by around 12% since September of last year.

A price cut could also reflect the overall damage wrought by the credit crisis on the global banking sector.

A second deadline for the transaction expired at the end of July but HSBC says it is retaining its interest and is in discussion with Lone Star about how matters might be taken forward.