ICBC in talks with Thai government on ACL Bank stake

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Industrial & Commercial Bank of China Ltd., the world's biggest bank by market value, is in talks with the Thai government to buy a controlling stake in ACL Bank Pcl, Finance Minister Korn Chatikavanij said.

ICBC is seeking government approval to own more than a 49 percent stake in ACL, Korn told reporters Thursday in Samui island, Surat Thani Province, 685 kilometers south of Bangkok. The finance ministry owns a 30.6 percent stake in ACL Bank and is the lender's biggest shareholder, according to the bank's website.

ICBC is adding emerging-market holdings as the state-owned company continues an overseas expansion begun in 2006 with the purchase of 90 percent of PT Bank Halim Indonesia. It agreed to buy 79.9 percent of Macau's third -biggest bank in August and bought a fifth of South Africa's Standard Bank Group Ltd. in October, the largest overseas acquisition by a Chinese lender.

"ICBC has been mainly focusing on markets that have growing trading ties with China and are rich in resources, such as South Africa and Canada," said May Yan, a Hong Kong-based analyst at Nomura International HK Ltd. For ACL. "Teaming with ICBC should be in their interest given the importance of China as a trading partner with Thailand."

ICBC's Beijing-based press officer Wang Zhenning declined to comment.

Bangkok Bank

Bangkok Bank Pcl, Thailand's biggest lender, agreed to sell its stake in ACL to ICBC, Chairman Kosit Panpiemras said on June 20. Bangkok Bank, ACL's second-largest shareholder with a 19 percent stake, previously aimed to complete the share sale to ICBC by the end of 2007. The deal was delayed pending a plan to raise overseas ownership limits in Thai banks to 49 percent.

"The finance ministry's most important criteria in the negotiation is how ICBC's purchase will benefit ACL Bank in the long term," Korn said. "How much they offer for ACL Bank's shares is the secondary."

Korn's comment was the first confirmation from Thai officials on ICBC's proposed acquisition of ACL Bank. Foreign investors need permission from the government to own more than half of a Thai commercial bank.

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