Banks Complete Largest IPO Ever - Agricultural Bank of China

LONDON and HONG KONG, Aug. 16 /PRNewswire/ -- Beijing based Agricultural Bank of China (AgBank), the last of the big four Chinese state-controlled banks to go public, became the largest initial public offering (IPO) on record this week. The third largest bank in China based on assets, priced its dual Hong Kong and Shanghai listed IPO on July 6, initially raising $19.2bn.

The overallotment option was exercised in full this week increasing the total deal value to $22.1bn, just ahead of Industrial & Commercial Bank of China's $21.9bn IPO priced October 2006. The deal is split between a $12.0 billion H Share offer and $10.1 billion A Share offer.

Raising this amount of capital can be complex and involve thousands of potential investors and numerous banks that need to collaborate to get the deal done. On the H-share portion alone there were seven bookrunners – CICC, Goldman Sachs, Morgan Stanley, Agricultural Bank of China International, Deutsche Bank, JPMorgan and Macquarie – all of which leveraged the Dealogic global bookbuilding platform and communication network for the successful execution of the deal.

Dan Dees, a Managing Director and Head of the Financing Group in Asia at Goldman Sachs, commented, "Managing a deal of this magnitude in a very challenging market in such a short period of time took considerable coordination and focus. The successful outcome of this landmark transaction is testament to the strength of Agricultural Bank of China's strong management, industry positioning and unique franchise."

Large IPOs often involve multiple bookrunners and a collaborative approach is essential to ensure accurate pricing and to mitigate risk. This year to date, IPOs valued over $500m have counted an average of 3.6 bookrunners but AgBank's IPO is the only deal on record to use more than nine bookrunners on a transaction.

Jody Drulard, Managing Director at Dealogic commented, "Two decades of close partnership with our clients has enabled Dealogic to establish the industry standard network for deal collaboration, culminating in multiple banks working together on the platform to successfully execute the world's largest IPO."

Since 2005 Chinese IPOs have accounted for a quarter of all Global IPO volume. In that period all four of China's big banks have gone public. China Construction Bank was first in October 2005 raising $9.2 billion while Bank of China raised $11.2 billion via its IPO in May 2006.

Chinese IPO activity has dominated new listings in 2010 accounting for 34% of deals done so far this year – up from 6% five years ago – and 47% of IPO volume ($64.9 billion). The success of an IPO of this size therefore not only bodes well for the future Chinese IPOs but also for the global IPO market as a whole.

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SOURCE Dealogic