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Temasek takes $2.3bn stake in Industrial & Commercial Bank of China

16 Apr 2012

Singapore sovereign wealth vehicle Temasek Holdings is planning to buy four per cent of China’s largest bank for about $2.3bn, it is understood.

Goldman Sachs is selling $2.5bn of shares in Industrial & Commercial Bank of China as it joins other global banks exiting their Chinese banking investments.

Temasek’s latest purchase adds to its existing holdings in China Construction Bank and Bank of China, which it has been increasing its stakes by buying shares from banks including Goldman, Bank of America and RBS since 2009.

Data from Bloomberg suggested the deal represented about 40 per cent of Goldman Sachs’ 8.78 billion shares in ICBC, meaning it will remain as the Chinese bank’s second largest investor.

ICBC’s share price dropped for the first time in three days following news of the deal, trading at about 6.4 times its estimated earnings.

Temasek set up new subsidiary Pavilion Capital in January to target funds and direct investment opportunities in North Asia and China.

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