Merchants to take time integrating Wing Lung

By Zhang Fengming  |   2008-6-20  |     ONLINE EDITION

CHINA Merchants Bank Co plans to spend two to three years to integrate Wing Lung Bank after agreeing to buy the Hong Kong-based lender for 19.3 billion Hong Kong dollars (US$2.5 billion).

Merchants Bank will ensure the stability of the management during the integration period, the Shenzhen-based bank said in an e-mailed statement today.

Merchants Bank promised not to cut employees at Wing Lung for 18 months.

"Retaining the core talent and keeping Wing Lung's original human resources mechanism for a certain period is a two-thronged approach to maintaining stability," Merchants Bank said.

Merchants Bank set up a team to implement the integration of Wing Lung on June 6. It signed the purchase agreement on May 30.

The lender said it will focus on asset management services, loans to small- and medium-sized enterprises and developing corporate and individual clients that have a close link between Hong Kong and the Chinese mainland.

Wing Lung's business includes insurance, trust, asset management and securities trading, which gives Merchants Bank a platform to learn more about the comprehensive financial business, it said in the email.

Merchants Bank said earlier this month it would pay a combined HK$19.3 billion for a 53.12 percent stake in Wing Lung.

Merchants Bank would then be required to make a general offer for all outstanding shares, leading to a total cash consideration of 32.4 billion yuan.

The acquisition should be completed by October 27.

Merchants Bank said on June 12 it plans to issue up to 30 billion yuan (US$4.34 billion) of subordinated bonds to boost capital for the acquisition.