Qatari royal family sell stake in European bank to Chinese investors

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China’s Legend Holdings struck a deal on Friday to buy a 90 percent stake in Banque Internationale a Luxembourg (BIL) for 1.48 billion euros ($1.76 billion) in the biggest takeover of a European deposit-taking bank by a Chinese firm so far.

Legend, best known as owner of computer group Lenovo Group Ltd, is acquiring 161-year-old BIL from Precision Capital, an investment vehicle of members of Qatar’s royal family, including former Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani.

Legend’s biggest overseas acquisition is being made through its Hong Kong subsidiary, Beyond Leap Limited, the company said. Reuters first reported in July that Legend was in talks with Precision on a potential acquisition of BIL.

Chinese companies have become increasingly interested in European banks despite the sector’s low profitability.

In May, China’s HNA became the largest direct shareholder in Deutsche Bank, while Fosun holds a 24 pct stake in Portugal’s largest listed bank Millennium BCP.

The BIL acquisition comes amid China’s heightened scrutiny of overseas deals by some large groups in an attempt to curb the country’s massive debt build-up. But finance is not on the restricted list of Beijing’s new rules on outbound investment.

Founded in 1856 as the oldest private bank in Luxembourg, BIL employs more than 2,000 people worldwide and had some 37.7 billion euros of assets under management at the end of 2016.

“This is an important strategic investment for Legend. Financial services is one of Legend Holdings’ key target industries,” Legend chairman Liu Chuanzhi said in a statement.

He said Legend aimed to support the bank and its existing management to grow BIL into a Luxembourg-based, international banking brand.

“We believe that as a long-term strategic shareholder, Legend can add value to the international business development opportunities and application of financial technology of the bank,” he said.

Apart from owning Lenovo, Beijing-based Legend, led by its long-time chairman Liu, one of China’s best-known entrepreneurs, is also the parent of private equity firm Hony Capital and venture capital firm Legend Capital.