Hang Seng Bank Shares Soar 25% After HSBC's $37B Buyout Offer

Hang Seng Bank experienced a dramatic 25% surge in its share value Thursday after parent company HSBC unveiled plans to privatize the Hong Kong-based financial institution in a deal valued at over 290 billion Hong Kong dollars ($37.2 billion). Europe's largest banking group has formally requested Hang Seng Bank's board to develop a privatization proposal for shareholder consideration through a scheme of arrangement compliant with Hong Kong's Companies Ordinance.

HSBC Chief Executive Georges Elhedery characterized the acquisition as "an exciting opportunity to grow both Hang Seng and HSBC," emphasizing plans to "preserve Hang Seng's brand, heritage and customer proposition while investing to unlock new strengths in products, services and technology." The executive framed the transaction as demonstrating HSBC's confidence in Hong Kong's status as a global financial center and its role as a "super-connector" between international markets and mainland China.

The acquisition proposal includes provisions for adjustments reflecting dividends declared after the announcement date, though it specifically excludes Hang Seng's third interim dividend for 2025 from such modifications. HSBC's official statement identified expansion in Hong Kong as a core strategic priority, asserting the organization is "best positioned" to achieve this objective by strengthening the combined banking presence of Hang Seng Bank and HSBC Asia Pacific throughout the territory.

While Hang Seng Bank shares experienced substantial gains following the privatization announcement, HSBC's own stock declined 5.8% in Thursday trading by 0815 GMT. The contrasting market responses reflect investor assessments of the transaction's relative benefits to each institution, with Hang Seng shareholders appearing to welcome the premium valuation while HSBC investors expressed concerns about the acquisition's financial impact on the parent company.