(Jan 8): Hang Seng Bank Ltd’s minority shareholders backed a US$14 billion ($18 billion) buyout offer from parent HSBC Holdings plc, supporting the UK lender’s move to double down on Hong Kong.
Almost 86% of shareholders voted in favour of the offer at a meeting held in Hong Kong on Thursday. The deal required at least 75% of the votes cast by minority shareholders to be in favour and not more than 10% against it. The listing of Hang Seng Bank shares on the Hong Kong Stock Exchange is expected to be withdrawn effective 4pm local time on Jan 27, it added.
HSBC, which already owns about 63% of Hang Seng Bank, offered US$155 a share, valuing the unit at US$37 billion. That represented a 30% premium to the closing price prior to the deal announcement. In December, the deal was also recommended by Hang Seng’s independent financial adviser and board committee.
The privatisation is a major bet on Hong Kong, which is recovering after years of political turmoil, rigid Covid restrictions and an exodus of people. Economic growth in the Asian financial hub has picked up and there has been a resurgence in stock listings and dealmaking, much of it driven by firms based in mainland China.
At the same time, the city’s banking sector is battling stress from the worst real estate slump since the Asian financial crisis in the late 1990s. While there are signs the residential market is stabilising, the office sector is still in the doldrums.
Hang Seng Bank’s credit-impaired loans to the commercial real estate sector rose to HK$25 billion (US$3.2 billion or $4.1 billion) as of June 2025, an 85% jump from a year earlier.
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‘Streamlined’ decisions
Sean Chang, a University of Hong Kong professor who holds Hang Seng Bank shares as part of a mutual fund investment, said he supports the deal, even though he won’t vote directly on it. HSBC’s buyout of Hang Seng Bank will result in more “streamlined” decision-making and make Hang Seng Bank more agile, he said. Hang Seng would also benefit from better risk management and governance with HSBC taking the lead, he added.
Chief executive officer Georges Elhedery previously said the purchase “delivers greater shareholder value than buy-backs”. To keep its capital ratio within range, the UK lender is also suspending buyback for three quarters.
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Still, not everyone was for the proposal as hundreds of Hang Seng Bank shareholders gathered at the meeting at the Hopewell Hotel on Thursday.
Raymond Ho said he didn’t like the offer as he bought the shares at an average of around HK$160 a share, which is above the HK$155 offered by HSBC.
“Now I lose my money,” he said, adding that he felt he wasn’t really given much of a choice as HSBC holds the majority of the shares.
Elhedery has undertaken the biggest overhaul of HSBC in at least a decade, reorganizing the lending giant into four new divisions while exiting some businesses his predecessors once considered key to the lender’s future. The UK lender has also over the past years pivoted to Asia, closing and selling off businesses across Europe and North America.
HSBC has said that Hang Seng, founded in 1933, will continue to operate under its own licence, governance and brand.
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