CCB 'close to deal' to acquire BicBanco

China Construction Bank, the nation's second-biggest lender by assets, is close to reaching a deal to acquire Brazil's Banco Industrial & Comercial, according to a person with direct knowledge of the matter.

BicBanco, as the lender is known, would probably fetch a price higher than its current market value of 1.67 billion reais (HK$5.93 billion) the person said, asking not to be identified because the talks are private.

Under the agreement, Construction Bank would buy the 70 per cent held by the controlling shareholders, the Menezes de Bezerra family, and make a tender offer to acquire the rest, the person said.

Acquiring a lender was the easiest way for Construction Bank to obtain a licence in Brazil as it followed customers to that nation, the person said.

China and Brazil in March agreed to establish a US$30 billion currency swap line and China National Petroleum Corp last week won the rights to help develop Brazil's biggest oil discovery in the Libra field.

"Chinese banks are interested in Brazil because it is an emerging market with faster economic growth," said Edmond Law, an analyst at UOB Kay Hian in Hong Kong.