Citigroup Leads Consortium to Bid on Chinese Bank

Citigroup is leading a consortium of investors in a bid to buy an 85 percent stake in China-based Guangdong Development Bank, according to last week?s Wall Street Journal. In the way is another group headed by Societe Generale.

The bidding battle has raged for the better part of a year. The competition is fierce because the leader of the winning consortium will take management control of the domestic bank. That will give the winner an advantage over foreign competitors in the race to tap China’s consumer-finance market, as Beijing prepares to fully open its banking sector to foreign competition.

The newest round of bidding comes in reaction to a ruling in April by the Chinese government encouraging bidders to include more Chinese businesses in their groups. In the previous round of bidding, Citigroup consortium had bid $2.93 billion while the Societe Generale group bid $2.86 billion.