Bank of America in $3 Billion Investment in China Construction Bank; Largest-Ever Foreign Investment in China

August 29, 2005

Cleary Gottlieb represented Bank of America Corporation in connection with its $3 billion investment in China Construction Bank (CCB).  CCB is the second largest bank in China, with approximately 14,500 branches.  This investment is the single largest foreign investment ever in a Chinese company and the first strategic investment in one of China's "big four" state-owned banks.     

Under the agreements, Bank of America acquired an approximate 9% stake in CCB and was also granted a 5 ½ year option to increase its stake in CCB to 19.9% for an aggregate purchase price of $2.5 billion.  In addition, Bank of America committed to invest $500 million in an initial public offering by CCB.  The parties also entered into a strategic assistance agreement under which Bank of America will provide strategic advisory and consulting services to CCB in a variety of areas.

Cleary Gottlieb has previously represented Bank of America in a number of matters, including its acquisition of FleetBoston Financial, which was the largest merger of 2003.