A Case Study Of ICBC's Merger And Acquisition Of Standard Bank Public Limited

With the development of China's "going global" strategy,more and more Chinese enterprises are adapting to the trend of economic globalization,participating in international market competition and cooperation extensively,and the demand for cross-border finance is growing rapidly.At present,China's commercial banks are in the forefront of the world in terms of scale,but the degree of internationalization and the level of diversification of business are far from the expectation,unable to provide sufficient and effective financial support for Chinese enterprises,so it is urgent to speed up the process of internationalization.In this context,China's commercial banks actively take the form of mergers and acquisitions of foreign banks to improve their financial support capabilities,especially ICBC Mergers and Acquisitions Standard Bank Public Limited,which breaks the situation of global transactions without the participation of Chinese banks.This paper takes this incident as a breakthrough point to conduct in-depth case analysis,with a view to providing reference for future cross-border M&A of commercial banks in China.In order to build a global market platform,upgrade non-traditional business and guide the focus on Africa strategy,ICBC acquired 60% of the shares of Standard Bank Public Limited in London in early 2015,and obtained the option to continue the acquisition by February 2,2020.Obviously,the representative and pioneering M&A case that happened four years ago has not been completed completely.The M&A is realized by restructuring new joint ventures,cash payment and stock options.There are three levels of risks in the process of M&A: bank,market and government.In order to test whether the motivation of M&A is realized,this paper makes performance analysis on both sides of M&A.The conclusions are as follows: on the one hand,the profit of Standard Bank Public Limited Company of the acquired party turned into profit and the financial situation was good;the scale growth was slow and the momentum of development was good;the management cost was high and the business cost was controllable.Therefore,the goal of building a global market platform has been preliminarily realized.On the other hand,the slowdown of the overall profit growth of ICBC,the increase of non-interest income,the rapid expansion of overseas branches and the increase of investment income of Standard Banking Group indicate that M&A has achieved the transformation and upgrading of non-traditional business to a certain extent,and better achieved the strategy of guiding and focusing on Africa.In a word,this M&A meets expectations and basically realizes the motivation of M&A,but it still needs follow-up integration.Suggestions for follow-up integration include mitigating conflicts between IT systems and teams,setting up consulting and advisory teams to actively dock customers,solving the problem of unsuitability of product design to Chinese customers,exploring the potential of RMB business in Africa,and improving the three defense lines model of ICBC standard risk management.At the same time,in view of the fact that the remaining exercise period of ICBC is less than one year,this paper makes a preliminary discussion on whether it should exercise the M&A option,and analyses the main influencing factors of whether to exercise the right,as well as the advantages and disadvantages of "exercise" or "abstain".Finally,from the analysis of the typical successful cases of cross-border mergers and acquisitions of commercial banks,five specific conclusions are drawn.