Citigroup Consortium Wins $3 billion Battle for Chinese Bank

by Mike Bevel, CollectionIndustry.com

After more than a year of battling ? or, what amounts to battling in the banking world; which, I guess, might be aggressive lunches and math — a Citigroup-led investment team won a 24.3 billion yuan ($3.1 billion) bid for control of Guangdong Development Bank (GDB).

Citigroup will share stakes in the Chinese bank with China Life Insurance Co. and China?s State Grid Corp. Each will take a 20 percent stake.

The consortium, which only recently confirmed its members and the size of their stakes, bested France’s Societe Generale which had teamed up with China’s Baoshan Iron and Steel Co. and top Asian oil refiner Sinopec Corp.

And what does Citigroup get for all its effort? A bank riddled with bad debt. However, GDB has more than 500 branches, and a fairly strong position in Guangdong, one of China?s richest provinces.