Magic circle duo and Davis Polk advise as Deutsche Bank offloads £2.7bn China stake

Davis Polk & Wardwell, Freshfields Bruckhaus Deringer and Linklaters have taken key roles in Deutsche Bank’s sale of its stake in Chinese lender Hua Xia Bank to Chinese insurance group PICC for up to RMB25.7bn (£2.7bn).

Freshfields acted for its long-standing client Deutsche Bank, with Hong Kong based corporate partners Melissa Thomas and Alan Wang in Shanghai and Heiner Braun in Frankfurt involved on the deal.

Davis Polk, fielding a team led by Hong Kong partner Antony Dapiran, advised the People’s Insurance Company (PICC) Group) of China on the acquisition of the 19.99 per cent stake in Shanghai-listed Hua Xia. The acquisition was valued at up to RMB25.7bn.

Linklaters advised PICC Property and Casualty Company, a subsidiary of PICC Group through which the acquisition was executed. The team was led by Beijing corporate partner Pui Hong Chik and Shanghai corporate managing associate Soo Jeong Hwang.

Background to this deal

Freshfields advised Deutsche Bank on its original investment in Hua Xia Bank in May 2006 and a number of follow-on private placements, which resulted in the German bank holding 19.99 per cent of the issued shares in Hua Xia – the highest shareholding by a foreign investor allowed in Chinese banks. Shanghai-based corporate partner Melissa Thomas has been a key client contact.

Linklaters has been a regular Hong Kong law advisor to PICC P&C. It acted on a number of the Chinese insurance company’s right issues in Hong Kong, including the $1.17bn H-share rights issue in 2014 and the a simultaneous $788m rights issue in Shanghai and Hong Kong in 2012. Teresa Ma was the lead partner in these two deals.

Freshfields was among a number of firms to have been reappointed to Deutsche Bank’s global panel following its most recent biennial review in July 2015.

US firms Cleary Gottlieb Steen & Hamilton and Latham & Watkins, Magic Circle firm Clifford Chance and also King & Wood Mallesons are other firms on the panel, which splits the firms on its roster by region, dividing them between EMEA, US and Asia.

Deutsche Bank uses an in-house tendering system known as Click4Legal meaning it has a list of preferred legal advisers but no fixed panel.