Oct. 25 (Bloomberg) -- Industrial & Commercial Bank of China Ltd. will pay $5.5 billion for a 20 percent stake in Standard Bank Group Ltd., Africa's largest bank, the Financial Times reported, citing an unidentified banker close to the deal.

It would be the biggest overseas acquisition by a Chinese company, according to data compiled by Bloomberg. Beijing-based ICBC is the world's largest bank by market value. Standard Bank, based in Johannesburg, will hold a press conference today at 2 p.m. local time, according to a statement issued yesterday.

The investment would mark ICBC's third overseas purchase in less than a year and come three days after Citic Securities Co. agreed to invest $1 billion in Bear Stearns Cos., the fifth- largest Wall Street firm. Chairman Jiang Jianqing is using the $22 billion ICBC raised in an initial stock sale a year ago to expand abroad as Citigroup Inc. and HSBC Holdings Plc set up branches in China.

``I can't think of a better timing for ICBC to make a move,'' said Wang Yihuan, a bank analyst at China Asset Management Co., which manages $28 billion including ICBC shares. ``Given its dominance at home and financial position, ICBC will have a lot of bargaining chips in negotiations.''

State-controlled ICBC is making the biggest foreign investment in South Africa since apartheid ended in 1994. Barclays Plc spent 30 billion rand ($4.5 billion) in 2005 to take control of Absa Group Ltd., the nation's biggest consumer bank.

Standard's Expansion

Chinese President Hu Jintao, seeking closer relationships with African nations in a bid to secure supplies of oil and other commodities, is encouraging investment in the continent. China was Africa's third-largest trading partner last year.

``China is moving into Africa in a big way,'' said Ian Troost, who helps manage the equivalent of about $9 billion at Metropolitan Asset Managers in Cape Town. ``This will help raise Standard Bank's international profile and the cash will give them a big war chest with which to make acquisitions.''

The FT didn't say how ICBC will pay for the stake. Standard Bank spokesman Erik Larsen declined to comment.

Standard Bank, which makes the same amount of profit from retail banking as it does from corporate and investment banking, has units in 18 African countries and 21 nations outside the continent. The company is expanding outside South Africa, where it earns most of its profit, to tap increasing trade in commodities and fees from investment banking.

Standard Bank has bought banks in Argentina, Nigeria, and Kenya and has said it may make acquisitions in Russia as well as start an operation in India, the fastest-growing economy after China.

Africa Ties

The bank's shares were suspended from trading today. They have climbed 17 percent this year, trailing the 21 percent gain in South Africa's benchmark stock index. ICBC stock has surged 48 percent in Hong Kong, taking its market value to $343 billion. Citigroup, the biggest U.S. bank, is worth $208 billion.

The deal may help ICBC reap more revenue by financing booming trade between China and Africa. Trade between China and the continent swelled 40 percent last year to $55.5 billion in 2006, making the nation Africa's third-largest trading partner, Deputy Commerce Minister Wei Jianguo said in May.

Hu, 64, has used China's rising wealth to forge closer ties with African nations. Last year, China agreed to double its aid to Africa by 2009, set up a $5 billion fund for investments in the continent, and pledged to provide $3 billion of loans over the next three years. China has $1.43 trillion in foreign exchange reserves, a record for any nation.

Three of Five

ICBC's investment in Standard Bank also underscores the growing global ambitions of China's companies. The nation, whose key stock index surged 169 percent this year, is now home to three of the world's five largest companies by market value.

Citic Securities' investment in Bear Stearns, announced Oct. 22, followed China Development Bank's July agreement to invest $3.1 billion in Barclays Plc. In May 2005, Lenovo Group Ltd. bought International Business Machines Corp.'s PC unit for $1.25 billion in cash and stock.

Jiang's overseas push began in December 2006 with the purchase of a 90 percent stake in PT Bank Halim Indonesia for 90 billion rupiah ($10 million). On Aug. 29, it agreed to buy 79.9 percent of Macau's third-biggest bank from billionaire Stanley Ho's Sociedade de Turismo e Diversoes de Macao for 4.68 billion patacas ($586 million).

Jiang's Cash Pile

ICBC will focus on expanding in emerging markets, Jiang, 54, said last month. The bank had 923 billion yuan ($123 billion) in cash and near-cash securities at June 30.

``They have a lot of cash on their balance sheet and they need to grow globally,'' said Binay Chandgothia, who oversees almost $1.9 billion at Principal Asset Management Asia in Hong Kong, including ICBC shares. ``I'm not surprised if Chinese banks go out and buy.''

Standard Bank in August said it expects second-half earnings growth to slow as higher interest rates in South Africa damp consumer demand for loans and cause a surge in bad debts. The bank's first-half profit jumped 29 percent to 6.35 billion rand.

To contact the reporters on this story: Luo Jun in Shanghai at Jluo6@bloomberg.netCathy Chan in Hong Kong at kchan14@bloomberg.net

Last Updated: October 25, 2007 03:10 EDT