Morgan Stanley exits its entire stake in CICC with government approval
The China Securities Regulatory Commission (CSRC) has finally approved Kohlberg Kravis Roberts, TPG Capital, the Government of Singapore Investment Corporation and Great Eastern Life Assurance’s purchase of Morgan Stanley’s 34.3% stake in Mainland investment bank China International Capital Corporation (CICC).
According to a statement by Morgan Stanley, the US bank expects to realize a pre-tax gain of approximately $700 million upon completion of the transaction, which is expected to close before the end of 2010. Morgan Stanley invested $35 million in CICC when it was established in 1995 but ceded management control in 2000.
While there is no formal announcement of the actual shareholding, Bloomberg reports that the two private equity firms will each get 10% while Great Eastern will have 5% and GIC will take over the remaining to boost its stake in CICC to more than 16% - making the sovereign wealth fund the bank’s second-largest shareholder after Central Huijin Investment, the local investment arm of the China Investment Company.
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