Bank of America ups China bank stake
Bank of America Corp. said Tuesday it plans to raise its stake in China Construction Bank Corp. to nearly 11%.
The Charlotte-based banking company said it will exercise part of the option it has to buy more common shares of the Beijing-based China Construction Bank.
The option would be exercised under the terms of agreement when it first invested in the China bank in June 2005, when Bank of America (BAC, Fortune 500) bought a 9% stake in the bank in a $3 billion deal.
Bank of America said it intends to purchase 6 billion H-shares on or about June 5 for about 2.42 Hong Kong dollars per share, which would take its total stake to 25.1 billion H-shares, or 10.75% of China Construction (CICHF) bank’s issued shares payday loans. The 6 billion new shares may not be sold until Aug. 29, 2011, the company said.
Bank of America currently holds about 8.2% of the issued shares.
Since 2005, the two banks have launched nearly two dozen partnership projects, including a leasing business in Beijing and no-fee cash withdrawals from Bank of America’s ATM machines in China.
Shares of Bank of America rose 18 cents to $34.11 in morning trading Tuesday.