China’s Legend Holdings struck a deal on Friday to buy a 90 percent stake in Banque Internationale a Luxembourg (BIL) from Qatar`s royal family for 1.48 billion euros ($1.76 billion), marking its biggest overseas acquisition.
Legend, owner of computer group Lenovo Group Ltd, is acquiring 161-year-old BIL from Precision Capital, an investment vehicle of Qatar royal family members including former Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani.
The purchase is being made through its Hong Kong subsidiary, Beyond Leap Limited, Legend said in a statement. Reuters first reported in July that Legend was in talks with Precision on a potential acquisition of BIL.
The acquisition comes amid China`s heightened scrutiny of overseas deals by some large groups in an attempt to curb the country`s massive debt build-up. But finance is not on the restricted list of Beijing`s new rules on outbound investment.
Founded in 1856 as the oldest private bank in Luxembourg, BIL employs more than 2,000 people worldwide and had some 37.7 billion euros of assets under management at the end of 2016.
"This is an important strategic investment for Legend. Financial services is one of Legend Holdings` key target industries," Legend chairman Liu Chuanzhi said in the statement.
He said Legend aimed to support the bank and its existing management to grow BIL into a Luxembourg-based, international banking brand.
"We believe that as a long-term strategic shareholder, Legend can add value to the international business development opportunities and application of financial technology of the bank," he said.
Apart from owning Lenovo, Beijing-based Legend is also the parent of private equity firm Hony Capital and venture capital firm Legend Capital.
The deal is subject to regulatory approvals, including from the European Central Bank and Luxembourg’s Commission de Surveillance du Secteur Financier, and is expected to be completed in the first quarter of next year.
BIL`s existing management team will remain in place after the takeover while the Luxembourg government will keep the remaining 10 percent of the bank, according to the statement.
"We are very pleased that this bank has found a new buyer from China, a country with which Luxembourg has developed a lot of relations knowing that we now have seven Chinese banks established here," Luxembourg Finance Minister Pierre Gramegna told reporters in Luxembourg.
($1 = 0.8398 euros)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)