ALLENS ARTHUR Robinson advised ANZ Bank’s largest Chinese investment to date — its US$263 million ($318 million) stake in the Shanghai Rural Commercial Bank (SRCB).
ANZ took 19.9 per cent of SRCB following four years of cooperation and negotiation between the two banks, which included the signing of a share subscription agreement in November 2006.
One of China’s largest law firms, Jun He, advised the SRCB.
The 745 million shares ANZ has taken is part of a wider strategy that involves the Australian bank providing technical assistance to SRCB on risk management, retail and small business banking, international trade, human resources and information technology.
Up to eight ANZ executives will join SRCB to help it in these areas.
The deal will also see two of ANZ’s executives moving on to the board of directors — Dr Bob Edgar and Alex Thursby, respectively senior managing director and group managing director Asia-Pacific.
“This is one of the largest investments that ANZ has made in Asia and it provides a significant growth opportunity in one of China’s most dynamic markets,” said Thursby in a statement.
“This partnership will leverage SRCB’s local franchise and position in the greater-Shanghai market and the broader Yangtze River Delta, coupled with ANZ’s expertise in many areas, including retail banking and risk management.”
Jeremy Low, lead partner on the deal for Allens, said his team had worked with ANZ on forging the deal over the past four years, a length of time which he said was common for deals of this nature in China.
“We were there from the very first meetings. Our role included assisting with the negotiations and really the relationship as well,” he said.
“Then of course as we got to the end of it to assist with negotiations and drafting of documentation and due diligence for the transaction.”
He said a very important part of the deal was the strategic relationship and the technical assistance being provided. “A lot of documentation and a lot of work went into that and it was a four-year project [to do that], there’s no doubt about it, and we were there through it all.”
As well as Low, Allens’ team included Campbell Davidson, Julian Donnan, Ross Keene and Troy Zhang.
Allens also advised ANZ on several recent investments in Asia, including the bank’s other major investment in China of 19.9 per cent of the Tianjin City Commercial Bank early this year, as well as a 19.1 per cent stake in Malaysia’s AmBank.