Bank of America to Boost China Construction Stake (Update1)
By Daniel at 17 November, 2008, 12:49 pm
By David Mildenberg
Nov. 17 (Bloomberg) — Bank of America Corp., the company that’s buying Merrill Lynch & Co., plans to almost double its stake in China Construction Bank Corp. to about 19.1 percent.
Bank of America will exercise its option to buy shares in China Construction from China SAFE Investments Limited, the Charlotte, North Carolina-based company said today in a statement. The U.S. bank said it expects the transaction to be completed by the end of this month.
The purchase ends speculation that Bank of America might consider selling some its stake to raise as much as $10 billion to blunt effects of the global financial crisis. The bank in May paid HK$14.5 billion ($1.87 billion) to buy 6 billion shares from China Construction, raising its ownership to 10.8 percent. China’s third-largest bank by market value said last month that third-quarter profit increased 12 percent on higher interest income.
“Bank of America intends to remain a long-term and significant strategic investor in CCB,” the bank said in its statement. The shares being acquired under the option may not be sold until Aug. 29, 2011 without Beijing-based CCB’s consent.
Last Updated: November 17, 2008 08:33 EST
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