HSBC has launched a HK$106.1 billion (US$13.6 billion) offer to acquire full control of Hong Kong’s Hang Seng Bank in a privatisation move that prompted an immediate credit rating downgrade and a sharp fall in its own share price, according to multiple media outlets.
Last week, the UK-headquartered bank announced it was willing to pay HK$155 per share, a 30 percent premium on Hang Seng’s closing price on Wednesday. HSBC already owns 63 percent of Hang Seng.
HSBC CEO Georges Elhedery said the purchase would give Hang Seng Bank “even more flexibility to manage its capital and its ratios more efficiently” and deliver better shareholder value than buybacks.
“The [plan] is a long-term strategic investment for growth, which we see as value-accretive for all shareholders in the long term.”
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The deal’s financing structure drew swift criticism from the market. To fund the acquisition, HSBC would pause its share buyback programme for three quarters, halting US$8.5 billion in planned returns to its own shareholders.
In response, financial firm Jefferies downgraded HSBC’s stock from “buy” to “hold.” Analyst Joseph Dickerson said the firm was “not enamoured of the terms on which HSBC is taking Hang Seng Bank private.”
The acquisition comes as Hang Seng has been grappling with a rising level of impaired loans, which reached 6.7 percent of its gross loans as of June 2025 – up from 2.8 percent at the end of 2023. This has been exacerbated by troubles in the Hong Kong and mainland Chinese property markets.
Upon completion, Hang Seng Bank will be delisted after 91 years on the Hong Kong Stock Exchange – though HSBC has stated it will preserve the Hang Seng brand and branch network.
