HSBC has made a significant move in the banking sector by proposing to privatize Hang Seng Bank, where it maintains a controlling interest. This initiative, announced Thursday, values Hang Seng Bank at over 290 billion Hong Kong dollars, equivalent to approximately $37 billion.
In its proposal, HSBC has requested that Hang Seng Bank’s board present a privatization scheme to its shareholders, as outlined under Hong Kong’s Companies Ordinance. According to the terms of the offer, existing shares in Hang Seng Bank would be canceled and shareholders would receive 155 Hong Kong dollars per share in compensation. HSBC currently holds about 63% of the bank, which effectively sets the deal’s value at around HK$106 billion. Furthermore, the proposal includes provisions for financial adjustments based on any dividends declared before the deal is finalized, with the exception of Hang Seng’s third interim dividend for 2025.
The financial giant indicated that the entire transaction would be financed through its internal resources, with an expectation that the acquisition would enhance its earnings. HSBC emphasized that expanding its presence in Hong Kong is one of its strategic priorities, asserting that the combination of HSBC Asia Pacific and Hang Seng Bank would optimize its standing within the region’s banking landscape.
As a core unit for HSBC, Hang Seng Bank boasts a robust footprint in the Hong Kong banking market, reinforcing HSBC’s commitment to fortify its operations in this vital area. This development is being closely monitored, and further updates are anticipated as the situation evolves.
