GCS sees Dexia asset management deal collapse - Update

Dexia had last week warned GCS that the transaction faced collapse after the end-of-June completion deadline was missed. This was despite the deal and purchase agreement being signed and all regulatory approvals being in place. Dexia had said the firm had until yesterday to "fulfill its contractual obligations" and close the transaction.

"As GCS Capital has not been able to meet its contractual payment obligations under the share purchase agreement since the initially scheduled closing date of June 28, Dexia feels compelled to definitively abandon discussions with GCS Capital and to formally terminate the share purchase agreement," the company said in a statement.

It added that it would resume discussions with other potential buyers for Dexia Asset Management, which has some EUR80 million under management.

The proposed transaction was first announced last December. It would have been one of the first big acquisitions by an Asian buyer of a European financial business since the global financial crisis.

Dexia is being broken up after it crashed during the global financial crisis. The group had to be bailed out three times by both the French and Belgian governments, unable to fund its EUR650 billion balance sheet, which included a EUR125 billion exposure to US subprime property assets.

GCS is led by Guocang Huan, an investment banker with Citigroup and HSBC who co-founded Primus Financial, another financial services-focused private equity firm, in 2009. It emerged last year that Primus had closed down and the fund was returning capital to investors.

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• Topics
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• buyout