Chinese Geely Becomes Majority Shareholder of Danish Bank Saxo

Chinese car manufacturer Zhejiang Geely Holding Group has announced an increase in its stake in Danish bank Saxo to over 50 percent, confirming the efforts of Chinese companies to secure access to the expertise of European financial firms.

Authorities in Beijing are trying to curb investments by Chinese companies abroad due to concerns about capital outflows. However, there are indications that the government in Beijing continues to support investments in foreign financial firms, especially to gain access to new technologies.

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Last month, Legend Holdings, which owns computer manufacturer Lenovo, purchased Banque Internationale a Luxembourg for €1.48 billion. Around the same time, according to a well-informed source, two Chinese conglomerates, HNA Group and Anbang Insurance Group, known for large acquisitions, were separately considering offers for the German insurer Allianz.

In May of this year, Geely announced that it would acquire a 30 percent stake in Danish Saxo Bank as part of efforts aimed at diversifying its portfolio. This is the first major investment by the Chinese company, which also owns Swedish car manufacturer Volvo, in the financial services segment.

The main source of revenue for Saxo Bank is its online trading platform, aimed at traders in currency markets, while traditional banking services are secondary.

– Saxo Bank is an attractive investment for Geely because its focus has always been on technology, whether in the field of finance (FinTech) or in the area of supporting compliance with regulatory requirements (RegTech), said a spokesperson at Geely in response to Reuters via email.

He added that Geely believes that the technologies and value of Saxo Bank’s products can expand throughout Asia.

Finnish company Sampo Oyj separately announced on Monday that it will acquire 19.9 percent of shares in Saxo Bank for €265 million, or $311 million. A spokesperson for Saxo Bank told Reuters that Geely will purchase their shares under the same conditions as Sampo. The Chinese company did not wish to comment on the price.

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Current shareholders of Saxo, TPG Capital and SinarMas, have accepted offers from Geely and Sampo and will sell their stakes of 29.26 and 9.9 percent, respectively, Saxo Bank reported.

The CEO of the Danish bank, Kim Fournais, who founded the company in 1992 with Lars Seier Christensen and Marc Hauschildt, will retain a 25.71 percent stake. Christensen agreed to sell his stake to Geely in May of this year.

Saxo Bank has 1,600 employees in 18 countries worldwide and concluded the year 2016 with operating revenues of 2.9 billion Danish kroner ($457.46 million). In comparison, Geely has over 60,000 employees worldwide.