BofA Close to Selling Part of China Construction Stake

Just a day after revealing a landmark, $5 billion investment by Warren Buffett, Bank of America is close to another major deal, says a person familiar with the matter: the sale of at least half its 10 percent stake in China Construction Bank to a smattering of sovereign-wealth funds and institutions.

China Construction Bank
STR | AFP | Getty Images
China Construction Bank

BofA’s planned deal, which could close as early as Monday afternoon in Hong Kong, when a six-year lockup on the U.S. bank’s investment expires, could raise between $8.5 billion and $9 billion, depending on the exchange rate and CCB’s closing share price that day, this person says.

While talks are still fluid and the deal could fall apart, BofA is motivated to sell at least half its CCB position in order to meet new capital requirements under Basel III, adds the person.

The final list of buyers is still to be determined, says this person, but are likely to include sovereign-wealth funds in mainland China, Malaysia, and elsewhere in Asia and the Middle East. Also likely to be involved are a handful of Asian and U.S. institutions, adds this person.

Earlier this week, Chinese officials told reporters in Beijing that BofA was committed to keeping at least half of its current CCB stake for the long term.

A spokesman for the U.S. bank declined to comment.

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