China Mobile signs €4.3b deal for SPD stake

China Mobile has inked a deal to buy a 20% stake in the Shanghai Pudong Development (SPD) Bank for 39.8 billion yuan (€4.26 billion).
Chairman and CEO Wang Jianzhou said he was confident the deal would win the required clearances of the raft of regulatory agencies that supervise two firms’ businesses.
Under the deal, Guangdong Mobile – China Mobile’s biggest subsidiary - will purchase 2.2 billion new A Shares in SPD Bank for cash, becoming the second largest shareholder in SPD Bank after Shanghai International Group and its affiliates.
Guangdong Mobile has signed an MoU with SPD Bank “to closely cooperate in the joint development of mobile finance and mobile e-commerce businesses.”
The investment requires approval from China’s banking regulator CBRC, securities watchdog CSRC and the state-owned assets agency SASAC as well as SPD Bank shareholders.
A senior SASAC official said earlier this week that the agency was opposed to state-owned enterprises (SOE) buying into non-core businesses. It also would not accept government industrial enterprises buying into banks.
Wang dismissed reports of SASAC opposition to the deal and claimed that it met all regulatory stipulations, the WSJ reported
China Mobile has agreed not to divest its SPD Bank stake for at least 36 months, but has no plans to raise its stake above 20%. It can elect three directors to the bank’s board.