HSBC offers a $13.6 billion deal to write off a local unit in Hong Kong

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HSBC Hang Seng Bank has proposed a HK$106 billion (US$13.6 billion) deal to delist its local Hong Kong bank Hang Seng Bank as Europe’s largest lender pushes ahead with a restructuring plan.

HSBC has offered to pay HK$155 per share, a 30 percent premium over Wednesday’s closing price, to take Hang Seng fully private in an all-cash deal valued at HK$290 billion.

HSBC, based in the United Kingdom, took control of Hang Seng during the banking crisis of 1965. It ranks among the most significant acquisitions made by the global bank along with Midland Bank in the United Kingdom in 1992.

It was Hang Sing It was hit hard by the recent real estate recession in Hong KongThe non-performing loan ratio reached 6.7 percent at the end of June – an all-time high.

HSBC has already begun a restructuring process at Hang Seng, appointing a new CEO in October.

George Al-Hudayri, Group CEO, said: “Our offer represents an exciting opportunity to grow both Hang Seng and HSBC. We will preserve the Hang Seng brand, its heritage, outstanding customer offers and branch network.”

“Our offer also represents a significant investment in Hong Kong’s economy, underscoring our confidence in this market and our commitment to its future as a leading global financial centre, and as a superior link between international markets and mainland China.”

In an internal email to staff, Al-Haidari added that he expected “an opportunity to create greater alignment between HSBC and Hang Seng Bank, which could lead to improved operational efficiency and efficiencies.”