Regulator approves Bank of East Asia's 11% stake buy in small Chinese firm

Acquisition of 11% stake in Golden Eagle Asset Management will provide BEA increased exposure and direct entry to the local Chinese market.

China's securities regulator approved Bank of East Asia Ltd.'s purchase of an 11% stake in Golden Eagle Asset Management Co., the Guangzhou-based asset management company said Wednesday.

The deal will give the Hong Kong lender increased access to China's fast-growing population of high-net-worth individuals.

Golden Eagle said its asset management unit BEA Union Investment Management Ltd. will buy the stake from Sichuan Southern Hope Industries Co., a unit of Chinese agriculture firm New Hope Group. BEA Union Investment Management was established in April.

Golden Eagle didn't disclose any of the deal's financial details, but Shanghai-based fund consultancy Z-Ben Advisors Ltd. said that based on similar deals that had taken place in China, it valued the deal around CNY28 million ($4.2 million).

"Although Golden Eagle still remains far from an ideal acquisition target, it does provide BEA Union with increased exposure to the mainland as well as direct entry to the local Chinese market," Z-Ben Advisors said in a note Tuesday, adding Golden Eagle hasn't been profitable since 2008.

View the full story in The Wall Street Journal.