China's Legend Holdings Makes European Push with Luxembourg Bank Deal

By Margot Patrick Features Dow Jones Newswires

Legend Holdings Corp. made one of China's biggest forays yet into European banking with an agreement Friday to buy Banque Internationale à Luxembourg SA from its Qatari owners and turn it into an international banking brand.

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Beijing-based Legend, best known for its stake in computer maker Lenovo Group Ltd., said it would pay Precision Capital SA EUR1.48 ($1.76 billion) for an 89.9% stake, valuing BIL at EUR1.6 billion. The Luxembourg government will continue holding the remaining shares.

BIL is Luxembourg's oldest privately owned bank, founded in 1856, when steel production dominated the grand duchy's economy. Legend Holdings Chairman Liu Chuanzhi said the plan now is to take BIL beyond being a national champion and make the brand international, while keeping its base in Luxembourg.

Luxembourg, now reliant on financial services to power its economy, has become a hub for Chinese banks operating in Europe.

Only a few European banks have been bought by the Chinese, though. In 2014, China's Haitong Securities Co. Ltd. bought the former Banco Espírito Santo investment banking business for EUR379 million.

BIL's seller, Precision Capital, is a vehicle of Qatar's royal Al-Thani family. It bought the bank in 2011 when BIL's then-parent, Dexia, was selling off assets to comply with a state bailout from France, Belgium and Luxembourg. The purchase price then valued the whole bank at EUR730 million.

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BIL had EUR37.7 billion in assets under management at the end of 2016, and total assets of EUR23.1 billion.

Legend is known for its portfolio of "new China" businesses in the consumer and financial sectors, seen as high growth because of the country's growing consumer class. The investment group already owns several financial services company in China, and bought a stake in a U.K. pensions insurer last year.

Write to Margot Patrick at margot.patrick@wsj.com

(END) Dow Jones Newswires

September 01, 2017 13:16 ET (17:16 GMT)