Bank of Nova Scotia will buy close to 20 percent stake in Bank of Guangzhou for about C$719 million or $722 million.
It seeks to expand its footprint in China, becoming the latest foreign bank to invest in a Chinese bank before the bank does an IPO.
Scotiabank, Canada's third-largest lender, said it expects the deal to add to earnings next year and to close by December this year.
"This is a very, very prosperous region in China. There are a lot of Fortune 500 companies that we would bank through our U.S. corporate banking operations, and there are a lot of Canadian companies in the province and city," Scotiabank's head of international banking, Brian Porter, said in an interview.
"We have a tradition of following our customers, and our customers are in the region, so we view this as very complementary and a nice fit for us."
The deal marks Scotiabank's second big acquisition in China, where foreign banks are limited to 20-percent stakes in no more than two Chinese banks. Scotiabank also holds a 14.8 percent interest in Bank of Xi'an, and will increase that stake to 18.1 percent pending regulatory approval.
The full story is available at Reuters.
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