Minsheng Bank: Penetrating The US Market Through Acquisition

Founded in 1996, China Minsheng Banking Corporation Limited ("Minsheng") was the first private commercial bank in China. By 2006, Minsheng had acquired almost US$130 billion in total assets and established almost 330 banking offices across the nation. The Banker magazine consistently praised Minsheng's development, ranking it number 310 in its top 1,000 business banks in the world in 2004, number 287 in 2005, and number 247 in 2006. In early March 2008, Minsheng obtained the green light from the China Banking Regulatory Commission to buy a 4.9% stake in US-based banking holding company, UCBH Holdings, Inc. ("UCBH") for US$95.7 million. The deal would eventually take Minsheng's stake in UCBH to 9.9%, totalling around US$200 million. The acquisition not only distinguished Minsheng as the first Chinese mainland institution to invest in a US bank, but was also viewed as a milestone for Chinese banks entering the US and international markets. On the flip side, UCBH would soon use this opportunity to make its own moves into China, leveraging its affiliation with Minsheng to totalingacquire other Chinese banks. This case examines the process of international expansion through acquisitions in the banking industry and the positioning of a growing bank in the global market, covering issues such as value creation, impact of government regulation and international barriers, the Chinese banking industry and its development, and the associated risks.

• Risk management
• Mergers and acquisitions
• Growth strategy
• Investment management
• International business