Straight but narrow

2 December 2009 By Wei Gu

ICBC, China’s biggest bank, may buy a $3bn stake in Taiwan’s Cathay Financial, while Taiwan’s Fubon has bid for a stake CICC, a leading mainland investment bank. These deals would signal a thaw in crossstraits relations. But minority stakes will give buyers few hard benefits.

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ICBC is in talks to buy a roughly 20 percent stake in Cathay Financial, Taiwan's biggest listed financial holding group, in a deal that could be worth more than $3 billion, according to Reuters. The stake purchase could be one of the first crossstraits deals since a financial cooperation
pact was signed in November.

Taiwan's Fubon Financial Holdings and several U.S. privateequity firms are bidding for Morgan Stanley's 34.3 percent stake in China International Capital Corp, the mainland
investment bank, according to people familiar with the situation. The stake could fetch more than $1 billion.

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