Bank of America announced Tuesday that it will sell its remaining stake in China Construction Bank Corp. in a deal that will net about $750 million.
The sale ends an eight-year investment the Charlotte bank no longer wanted as it has continued to cut costs and shed assets.
The bank is selling its 2 billion shares in the open market, at a discount of about 3 percent from China Construction Bank’s latest closing price on the Hong Kong Stock Exchange. The transactions should settle in the next few days.
Betting on China’s rapid growth, Bank of America took a 10 percent stake in the giant Chinese lender in 2005 and later added to its investment. It began selling portions of its stake in 2009, earning about $10 billion that year in pretax gains. Along the way, Bank of America brought in hundreds of millions at a time in dividend payments. CEO Brian Moynihan sold off the majority of the investment two years ago as the streamlining initiative known as Project New BAC got underway. That project also included selling stakes in foreign assets like credit-card portfolios in Spain and an investment in the Spanish banking group Santander.
Tuesday’s sale of Bank of America’s remaining shares – about 1 percent of China Construction Bank – comes a month after expiration of a lock-up agreement preventing the bank from selling more shares. Bank of America will still provide “advice and assistance” to the Chinese lender in areas like customer service and sales, the bank said.
Dunn: 704-358-5235; Twitter: @andrew_dunn
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