China (PRC)
Agricultural Bank of China Limited (ABC), one of China’s “Big Four” state-owned banks, has undertaken a US$19.2 billion IPO and dual listing on the Hong Kong and Shanghai stock exchanges. The transaction has already earned the title of the largest IPO globally in 2010 to date, and may also become the largest IPO in the world – potentially raising US$22.1 billion with its flotation surpassing Industrial & Commercial Bank of China’s 2006 IPO – if both over-allotment options are exercised.

Headquartered in Beijing, ABC was the first commercial bank to be established in the People’s Republic of China in 1951. Since that time, ABC has grown to represent nearly 24,000 branches throughout China, Hong Kong and Singapore, and boasts of 320 million retail customers and 2.7 million corporate clients, making it China’s largest bank by number of customers. Upon completion of the IPO, it will become the fourth biggest bank in the world by market capitalisation behind ICBC, China Construction Bank and HSBC.

The IPO consisted of a listing on the Main Board of the Hong Kong Stock Exchange, including a Rule 144A/Regulation S international offering, as well as an A share offering on the Shanghai Stock Exchange, and an assortment of law firms advised on the transaction in various capacities.

Led by partners Teresa Ko and Antony Dapiran, Freshfields Bruckhaus Deringer acted as Hong Kong counsel to ABC, also advising it on the cornerstone investments in the IPO – including investments by eleven major sovereign, institutional and corporate investors – for a total of US$5.45 billion. Following the transaction, Freshfields becomes the only law firm to have acted on the IPOs of all four of the “Big Four” Chinese state-owned banks, being China Construction Bank (2005), Bank of China (2006), Industrial and Commercial Bank of China (2006) and now ABC. US law advice was provided to ABC by Davis Polk & Wardwell LLP, whilst DaHeng Law Offices acted as PRC counsel to the colossal bank.

Herbert Smith was also able to draw on earlier experience gained from having advised China Construction Bank on its US$9.2 billion floatation and ICBC on its US$21.9 billion flotation. This time around, the firm advised the joint sponsor, joint bookrunners and joint lead managers – comprising China International Capital Corporation, Goldman Sachs, Morgan Stanley, Deutsche Bank, JP Morgan, Macquarie and ABCI Securities – in respect of the Hong Kong aspects of ABC’s IPO, led by corporate partners Tom Chau and John Moore. The same parties were also advised by Allen & Overy as to US law, led by partners David Johnson, Mark Roppel and Linda Lee, and by Haiwen & Partners as to PRC law.

Meanwhile, Beijing-based partners Yang Xiaolei, Tang Lizi and Su Zheng led a team from King & Wood in advising the four underwriters to the transaction – comprised of China International Capital Corporation Limited, CITIC Securities Ltd, Guotai Junan Securities Co Ltd and China Galaxy Securities Co Ltd – as their shared legal counsel in respect of ABC’s A-share IPO.

Clifford Chance advised Rabobank in respect of a US$250 million cornerstone investment in the Hong Kong IPO, led by Roger Denny.

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