HSBC chance to float over to South Korean banking business is facing obstruction from unions as negotiations to secure the $4.5bn deal is feeling heat.
Banking giant HSBC is in talk to buy a controlling stakes in Korea Exchange Bank (KEB), but ongoing legal and political mishmash over its private-equity ownership is thwarting its chances.
Lone Star owns 51% shares in KEB and seeks to sell it over legal and political pressure. HSBC, which has twice lost out to rivals in previous tussles for Korean banks seeks to cash the chance to give it a foothold in Asia’s third-biggest economy.
Sources confirm the talks between HSBC and Lone Star at an early stage, and are progressing on the basis that HSBC would retain KEB’s name and stock market listing in Seoul. To end the union’s woes, negotiators’ panel assures that the protection and growth of employees in the organization will be a top priority.
HSBC said: “The discussions are ongoing and, if agreement is reached, the transaction would be conditional, inter alia, on obtaining the necessary regulatory approvals in Korea and elsewhere,”
Although, negotiations is feeling heat over the union’s apprehensions and panel is taking note for their rights, yet the legal complications of KEB suggests that completing a deal will not be easy. Earlier Lone Star was approached by the Kookmin Bank of Korea and DBS of Singapore, but their talk aborted over the legal complications.
Legal snag put all the previous efforts on the dock and so this deal can also tangle in the regulatory investigations.
Via: Telegraph
