Banking major Standard Chartered Bank today said that it will invest $500 million in an initial public offering launched by the Agricultural Bank of China, expected to be the world's largest public issue.
Standard Chartered Bank would invest $500 million as a "cornerstone investor" in the IPO of the Agricultural Bank of China (AgBank) in Hong Kong, it said in a statement.
AgBank, one of the top four commercial banks in China, hopes to set a world record by raising up to $23.2 billion in a dual initial public offering (IPO) in Hong Kong and Shanghai before its scheduled trading debut in the middle of next month.
"The Agricultural Bank of China is a great bank with a great future. This investment is a natural next step in our long-standing relationship, and it underpins our recent agreement to develop business together. China is a key market for us and our partnership is a strong symbol of commitment there," StanChart Group Chief Executive Peter Sands said.
The transaction, however, is subject to the successful completion of AgBank's IPO, the statement added.
The consideration, to be financed from Standard Chartered's internal cash resources, would be for a number of shares with a total value at the offer price of the Hong Kong dollars equivalent of $500 million, it said.
Recently, the two banks had also signed an agreement to explore opportunities for collaboration across StanChart's international network and AgBank's extensive domestic network.