China banks turn down German Dresdner deal
NEW YORK/FRANKFURT (Reuters) - China’s major financial institutions, including its sovereign wealth fund China Investment Corp (CIC), poured cold water on the idea of the possible purchase of Allianz’s (ALVG.DE: Quote, Profile, Research) Dresdner, citing investment risk and political problems as major concerns, Chinese bankers told Reuters on Thursday.
Industrial and Commercial Bank of China (601398.SS: Quote, Profile, Research) (ICBC), China’s top bank by assets, received an investment proposal late last year for a possible acquisition of Dresdner’s corporate and investment banking business. However, ICBC vetoed the idea after reviewing the financial position of the German bank, one of the bankers close to ICBC said.
A CIC executive with knowledge of the fund’s overseas investment plans, said CIC, which manages $200 billion, was not in talks with Allianz or Dresdner for such a deal.
“As far as I know, CIC is not in such kind of talks with Allianz or Dresdner,” said the CIC executive.
“Also in my personal view, I don’t think it is a good time for CIC to invest in Germany,” he added, citing political problems as one of its major concerns.
German Chancellor Angela Merkel’s decision to meet the exiled Tibetan spiritual leader Dalai Lama last year led to a four-month chill in relations between Germany and China, the world’s fastest growing major economy.
German newspaper The Sueddeutsche Zeitung, citing industry sources, reported on Thursday that CIC is in “intensive talks” to buy the whole of Allianz’s Dresdner Bank and the talks between CIC and Allianz were continuing.
On Wednesday, Germany’s manager magazine had reported that a Chinese bank was interested in buying Dresdner’s corporate and investment banking activities, known as Dresdner Kleinwort.
Tags: business, commercial
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