AmEx, Allianz raise $1.9 billion in ICBC stake sales

By Donny Kwok and Michael Flaherty

HONG KONG (Reuters) - German insurer Allianz (ALVG.DE) and U.S. credit card group American Express (AXP.N) raised a combined $1.9 billion on Tuesday through the sale of shares in Chinese banking giant ICBC.

The move was expected, as the two sellers, hoping to tuck away cash in the grim economic climate, had signaled a desire to sell shares in Industrial and Commercial Bank of China (1398.HK) (601398.SS), the world's largest bank by market value.

Allianz and American Express sold large blocks of ICBC's Shanghai-listed shares at HK$3.86 per share, or a 4 percent discount to Monday's closing price, a source with direct knowledge of the deal said on Tuesday. ICBC is also listed in Hong Kong.

When China restructured its major banks several years ago, Western financial institutions took stakes in several Chinese lenders, hoping to profit from the investments while forging a strategic partnership in a fast-growing country.

ICBC went from being a bailed-out bank to the world's largest and most profitable, with a market capitalization of more than $190 billion.

But after the financial crisis took hold last year, Western banks moved quickly to raise much-needed cash by selling out of their Chinese stakes.

Royal Bank of Scotland (RBS.L) and Bank of America (BAC.N) dumped shares in Bank of China (3988.HK) (601988.SS) and China Construction Bank (0939.HK) (601939.SS), respectively, when lockups expired earlier this year.

While Goldman Sachs (GS.N) was originally free to sell half its 4.93 percent stake in ICBC this month and the rest in October, last month it pledged to keep 80 percent of that stake until April 2010.