Summary
Bank of America Corporation (BAC) announced on August 29, 2011, its agreement to sell a significant portion of its stake in China Construction Bank Corporation (CCB). The company is selling approximately 13.1 billion common shares of CCB to a group of investors in a private transaction. This strategic divestiture is expected to provide a substantial cash infusion of approximately $8.3 billion for Bank of America. Furthermore, the company anticipates recognizing an after-tax gain on the sale estimated at $3.3 billion. Following the completion of this transaction, Bank of America's ownership in CCB will be reduced to approximately 5 percent. The deal is anticipated to close within the third quarter of 2011, pending the satisfaction of standard closing conditions. This move signals a potential shift in BAC's portfolio strategy, aiming to bolster its capital position.
Key Highlights
- 1Bank of America agreed to sell approximately 13.1 billion common shares of China Construction Bank (CCB).
- 2The sale is a private transaction with a group of investors.
- 3Expected cash proceeds from the sale are approximately $8.3 billion.
- 4An after-tax gain on sale of approximately $3.3 billion is anticipated.
- 5Following the sale, Bank of America will retain approximately 5% ownership of CCB.
- 6The transaction is expected to close in the third quarter of 2011.
- 7The sale is subject to customary closing conditions.