Standard Chartered PLC has received all the required approvals leading to the completion of its acquisition of American Express Bank Ltd (AEB) from the American Express Company (AXP).
The total cash consideration for the acquisition is $823 million.
The acquisition of AEB provides Standard Chartered with an opportunity to add capability, scale and momentum in the strategically important Financial Institutions and Private Banking businesses. It will add 19 more markets to the Standard Chartered footprint, while deepening presence in some core markets and providing access to several new growth markets.
The addition of the AEB business will fast track the growth aspirations of The Standard Chartered Private Bank, building immediate capability and scale in people, product and processes. AEB will enhance Standard Chartered’s private banking presence in its key markets, leveraging on its exceptional advantage to grow market share and build scale in existing markets like Singapore, Hong Kong, India and The Middle East. It will also add capability in trust, fiduciary services, margin trading, wraps, and extend geographic reach with new booking centres in Geneva, Monaco, Miami, New York and London.
AEB will also help accelerate Standard Chartered’s Financial Institutions business and significantly enhance its capabilities in this core customer segment. This acquisition doubles Standard Chartered’s US Dollar clearing business reinforcing its position among the leading US Dollar clearing businesses and ranking the group sixth globally. In addition, AEB provides Standard Chartered with a direct Euro and Yen clearing capability. The extended geographic reach into new countries and deepening of Standard Chartered’s presence in key existing markets will capture more trade and investment flows.
The Global Investment Group (GIG) develops and manages a wide range of traditional and innovative investment products for distribution directly to institutional clients and through the Global Wealth Management business to Private Banking and Financial Advisory Services clients. For institutional clients in Europe, The Global Investment Group offers an innovative range of mutual investment funds registered in Luxembourg, and managed by independent, best of breed selection of asset managers.
“I welcome the American Express Bank employees into the Standard Chartered family. The AEB business brings along an exceptional management team and I look forward to them playing an important role in the Group,” says Peter Sands, Group CEO, Standard Chartered PLC.
As part of the transaction Standard Chartered and AXP have entered into a put and call option under which AXP can sell and Standard Chartered can buy 100% of American Express International Deposit Company (AEIDC) 18 months from today. The consideration payable to AXP will be the net asset value of AEIDC at the time of exercise of the option.
The integration is expected to take approximately 24 months.