Standard Chartered to acquire American Express for $860 million

18 September 2007

Mumbai: Standard Chartered Plc will buy American Express Bank, a wholly-owned subsidiary of American Express Company (AXP), for around $860 million in cash to boost its private banking and correspondent banking services.

The Asia-focused UK-based Standard Chartered Bank said the consideration was equal to the net asset value of American Express Bank, calculated at $860 million as of 30 June, plus $300 million.

American Express put the final purchase price at about $1.1 billion, a sum that includes an additional payment for the residuals of American Express''s Cayman Islands subsidiary.

The acquisition provides Standard Chartered with an opportunity to add capability, scale and momentum in two strategically important businesses. In the Financial Institutions segment, the acquisition will double the size of Standard Chartered''s dollar clearing business and provides a direct Euro and Yen clearing capability. American Express Bank will also fast-track the development of The Standard Chartered Private Bank.

"We are delighted to welcome the employees and customers of AEB into Standard Chartered," Standard Chartered''s group chief executive Peter Sands, said. "The acquisition will add capability and scale to two of the Group''s strategically important businesses. AEB''s balance sheet is highly liquid and its income is predominantly fee-based. This is a transaction, which has compelling strategic and financial logic and is management accretive."

Chairman and chief executive Officer of AEB, W. Richard Holmes said, "This transaction represents an exciting development for the customers and employees of AEB. Becoming part of a major global financial institution whose primary focus is on international banking will afford attractive expanded opportunities for our business."