Haitong to Buy Portugal Investment Bank for $467 Million

Haitong Securities Co., China’s second-largest brokerage by market value, will buy the investment banking unit of Portugal’s Novo Banco SA for 379 million euros ($467 million) to expand outside its home market.

The sale of Banco Espirito Santo de Investimento SA is dependent on approval from regulators, including the Bank of Portugal and European Commission, Novo Banco said in a statement yesterday.

“The proposed acquisition will bring significant strategic value for the group,” Haitong said in a filing to Hong Kong’s stock exchange yesterday. The deal will help the brokerage further develop cross-border operations, improve client service capabilities and share resources, it said.

Banco Espirito Santo, once Portugal’s biggest lender by market value, was bailed out in August after regulators ordered it to raise more capital following the disclosure of potential losses on loans to some of its parent companies. The central bank created Novo Banco by moving the bank’s deposit-taking units and other assets into a new company.

With $3.9 trillion in foreign exchange reserves in China and increasingly internationalized companies seeking to diversify incomes geographically, purchases abroad are on the rise. In the nine months through September, China’s outbound investments were $75 billion, an increase of 22 percent from the same period last year, the Ministry of Commerce said in October.

In November 2009, Haitong bought a majority stake in Hong Kong’s Taifook Securities Co. for $235 million, the first purchase of an overseas brokerage by a mainland securities firm. Founded in 1988, Haitong has 230 branches and 4.6 million individual clients, according to its website.

Before it's here, it's on the Bloomberg Terminal.