Standard Chartered Plc reached an agreement to acquire US-based American Express Bank Ltd for about 431 million pounds (860 million dollars) in cash ? a deal that would give the British banking major additional branch licences in India.
StanChart said in a statement that it has agreed to acquire American Express Bank from American Express Company for a total cash consideration equal to the net asset value of AEB at completion plus 300 million dollar in cash. As of June 30, 2007, this would have amounted to approximately 860 million dollar, it said.
AEB, whose New York-based parent company AXP is the third-largest credit card network, is a leading international bank present in 47 countries, including India.
The acquisition, which is subject to certain conditions, including regulatory consents, is expected to be completed in the first quarter of 2008.
StanChart said that AEB provides it with an opportunity to add capability, scale and momentum in the strategically important financial institutions and private bank businesses.
Among other benefits, “the acquisition will include valuable branch licences in India and Taiwan subject to regulatory approvals,” it said.
According to the data released by Reserve Bank of India, Standard Chartered is the largest foreign bank in India in terms of branches with a total of 81 branches, as against American Express Bank’s seven branches as of September 2006 out of total 258 branches of 29 foreign banks.
AEB’s global correspondent banking business caters to approximately 1,700 banks in over 120 countries and its private bank services to over 10,000 customers with total assets under management of around 22.5 billion dollar as at December 31, 2006.