GCS Capital, Dexia deal in doubt as deadline missed

In a statement, Dexia said that, as the end-of-June deadline for completing the sale has been missed, it had decided to terminate the process, following discussions with GCS. This is despite the signing of the deal and purchase agreement and all regulatory approvals being in place.

However, Dexia added that GCS had until July 30 to "fulfill its contractual obligations and close the transaction." According to the Financial Times, the delay had been on GCS's side and Dexia had in affect told the firm to say "yes" or "no" to the deal.

The sale of the unit, which has about EUR80 billion under management, was announced last December. It was set to be 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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