Hong Kong – HSBC Holdings plc (HSBC) has announced that it, together with its wholly owned subsidiary The Hongkong and Shanghai Banking Corporation Limited (HSBC Asia Pacific), has proposed to privatise Hang Seng Bank Limited (Hang Seng) through a scheme of arrangement, which would see HSBC acquire all remaining shares and delist Hang Seng from the Hong Kong Stock Exchange.
Under the proposal, HSBC is offering HK$155 per share for each Hang Seng share owned by minority shareholders—a 33% premium over Hang Seng’s average share price of HK$116.5 over the past 30 days. The offer values Hang Seng at about HK$290 billion, a figure notably higher than most other Hong Kong banks. HSBC added that this offer is final and will not be raised further.
If approved, the plan will give Hang Seng’s minority shareholders an immediate cash payout, allowing them to benefit from HSBC’s investment in Hang Seng without waiting for future dividends. HSBC said the move supports its goal to strengthen its business in Hong Kong, one of its key markets, while simplifying its structure and investing further in local growth.
The group also assured that Hang Seng will continue to operate under its own name and management, keeping its independent banking licence, brand identity, and branch network. Customers will still enjoy Hang Seng’s products and services while gaining wider access to HSBC’s international network and financial offerings.
HSBC said it will fund the buyout using its own resources. The deal is expected to slightly impact its capital ratio in the short term, but the bank plans to recover this through regular business profits. To help with this, HSBC will temporarily pause its share buyback programme for three quarters after the announcement, though the buyback announced on 31 July will proceed as planned.
The bank said it remains committed to paying out half of its 2025 profits as dividends and expects the Hang Seng investment to boost its future earnings.
Georges Elhedery, group CEO of HSBC, commented, “Our offer is an exciting opportunity to grow both Hang Seng and HSBC. We will preserve Hang Seng’s brand, heritage, distinct customer proposition and branch network, while investing to unlock new strengths in products, services, and technology to deliver more choice and innovation for customers. Our offer also represents a significant investment into Hong Kong’s economy, underscoring our confidence in this market and commitment to its future as a leading global financial centre and as a super-connector between international markets and mainland China.”
“This proposal fully meets our criteria for value-accretive investments: it aligns with our strategy, enhances growth and scale, does not distract us from organic growth, and delivers greater shareholder value than buybacks,” he continued.
“Together, HSBC and Hang Seng form a well-positioned platform with two iconic banking brands working side by side to deliver lasting value for customers, employees, and shareholders,” Elhedery concluded.
HSBC said it will issue a formal document to Hang Seng’s minority shareholders soon, outlining the full details of the proposal. The plan will still need approval from shareholders and confirmation by the Hong Kong High Court before it can take effect.
In a separate announcement, Hang Seng Bank said that its Board has formed an Independent Board Committee (IBC), made up of five independent non-executive directors with no interest in the transaction, to review the proposal and assess whether it is fair and reasonable. With the IBC’s approval, the Board will appoint an Independent Financial Adviser (IFA) to provide professional advice on the proposal.
Hang Seng added that a Scheme Document will be released in due course, containing full details of the proposal, an explanatory statement, the expected timeline, the IBC’s recommendation, the IFA’s advice, and notices of the Hang Seng Court Meeting and General Meeting.
