Report: Hopu, Temasek buy into CCB in $7.3bn deal

A reported 6% stake sale by Bank of America in China Construction Bank has allowed Temasek to increase its 5.6% stake. For Hopu, it marks its second investment in a Chinese bank this year.

Bank of America has reportedly sold a stake of about 6 percent in China Construction Bank to investors including Singaporean sovereign wealth fund Temasek Holdings and Fang Fanglei’s Hopu Investment Management for $7.3 billion.

The US Bank sold about 13.5 billion shares at HK$4.2 ($0.54; €0.40) each, people familiar with the matter told the Financial Times. It retains a 10.6 percent stake in the Chinese bank.

Temasek already owns a 5.6 percent stake in the bank, the report noted, while Hopu Investment Management is a new investor.

This is Hopu’s second investment in a Chinese bank in 2009. In January, the firm reportedly bought approximately $400 million-worth of shares in Bank of China. It led a consortium of investors in the acquisition of a stake worth about $700 million when the Royal Bank of Scotland sold its entire stake in the Chinese lender for $2.4 billion.

As of 31 March 2008, 40 percent of Temasek’s investment portfolio was focused on the financial services sector. In 2007, it invested $8.3 billion for a stake in Merrill Lynch and $2 billion for shares in Barclays. It also upped its 18 percent stake in Standard Chartered Bank to 19 percent. In September 2008, the fund received US antitrust approval to increase its stake in Merrill Lynch, when the bank merged with Bank of America.

Temasek is also one of the anchor investors in Hopu Fund, a $2.5 billion private equity vehicle managed by Hopu Investment Management.

A China Construction Bank spokeswoman said that the bank had “nothing to disclose yet”. Temasek and Hopu could not be reached for comment at press time.