MUFG would acquire the shares of BNP in a joint venture in China

Mitsubishi UFJ Financial Group (MUFG) is planning to resume participation of BNP Paribas in a Chinese joint venture asset management for 50 million dollars (38.2 million euros), we learn two sources familiar with the matter.

This would allow the first Japanese bank to enter the Chinese market for the management of funds, estimated at 237 billion euros and could exceed 765 billion euros in five years, according to consulting firm Z- Ben Advisors.

BNP Paribas and MUFG will submit the draft to the Chinese authorities before the end of the month, after rejecting an initial application for minor technical reasons, "said one source.

Once disengaged from SYWG BNP Paribas Asset Management, BNP Paribas will hold only one license for fund management in China and thus in keeping with rules set by Beijing, which prohibit foreign companies from holding more than one license in that market .

VERY ATTRACTIVE OFFER

Over thirty foreign institutions, including JPMorgan, Credit Suisse and Morgan Stanley, have formed joint ventures in fund management in China, while groups such as Aberdeen Asset Management and T. Rowe Price are looking to break into this market.

MUFG has prevailed over a dozen other candidates for the takeover of parts of BNP, among whom were Japanese Nomura Holdings and Britain's Ashmore Group.

The offer of the Japanese for 33% of BNP Paribas is a ratio of prices on assets under management of approximately 10%, against a normal value of 5%, thus making the supply of MUFG very attractive.

SYWG BNP Paribas was established in 2004 by BNP Paribas and the Chinese broker Wangguo Shenyin & Securities Co, which owns two thirds of the capital.

The joint venture had 10.4 billion yuan (1.2 billion euros) in assets under management at the end of June, 0.49% of the market, against 0.9% at end 2009.

After this assignment, BNP Paribas will not have more than a joint venture in China Fund Management, Fortis Haitong, which manages about 40 billion yuan of assets, or 2% of the market.

August 2nd, 2010 in Uncategorized, business success, corporations, management, occupation | tags: , , , ,