New Delhi, April 27
UK-based Standard Chartered Plc has taken a major step towards consolidating its presence in the South Asian market by acquiring Grindlays from Australia and New Zealand Banking Group Ltd for $1.34 billion. Following this development, the StanChart group has leapfrogged into the 'top players' slot among foreign banks in the Indian subcontinent.
This is Standard Chartered's biggest acquisition, with the purchase price representing approximately 10 percent of the company's balance sheet. Standard Chartered insists that the price of the takeover is "very favourable", considering the current prices of other emerging markets banks or the acquisition prices for such banks.
By hammering out this deal, Standard Chartered has sent a loud and clear message about its intensions in the East Asian markets, especially Taiwan and Thailand. StanChart is already the second largest bank in Hong Kong, behind HSBC. Incidentally, in the wake of the Asian economic meltdown in the mid-1990s, Standard Chartered was mired in a severe bad debt situation. Thereafter, it has enjoyed a bullish run, with its share price outperforming most other UK-listed banking stocks in the last two years.
As far as ANZ's chief executive John McFarlane is concerned, it's a home coming of sorts. McFarlane was with Standard Chartered until March 1997, before joining ANZ as its chief executive.
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