HSBC Holdings plc has announced a proposal to privatise Hang Seng Bank Limited through a scheme of arrangement. The plan, if approved, would see HSBC Asia Pacific, a wholly owned subsidiary of HSBC, acquire all remaining shares of Hang Seng held by minority shareholders. As a result, Hang Seng shares would be withdrawn from the Hong Kong Stock Exchange.
The offer values each Scheme Share at HK$155, which is 33% higher than the average closing price over the past 30 days of HK$116.5 per share. The total privatisation offer amounts to HK$106 billion and values Hang Seng at HK$290 billion on an equity value basis.
HSBC stated that this proposal is part of its strategy to increase its leadership and market share in areas where it has competitive advantages and sees opportunities for growth. The bank emphasized its commitment to retaining Hang Seng’s brand, heritage, and distinct customer proposition.
The valuation of Hang Seng implied by the proposal is 1.8 times the price-to-book multiple for the first half of 2025, which is higher than comparable banks in Hong Kong. HSBC described this as a final offer that will not be increased further.
The proposal aims to provide immediate cash returns to minority shareholders of Hang Seng, allowing them to benefit from HSBC’s investment without waiting for future dividends.
HSBC said it intends to fund the acquisition with its own financial resources. The expected initial capital impact is approximately 125 basis points following approval at both the Hang Seng Court Meeting and General Meeting.
HSBC expects to restore its Common Equity Tier 1 (CET1) ratio to its target range of 14.0%-14.5% through organic capital generation and by pausing further share buybacks for three quarters after this announcement. The ongoing buyback announced on July 31 will continue as planned.
Georges Elhedery, Group CEO of HSBC, said: “Our offer is an exciting opportunity to grow both Hang Seng and HSBC. We will preserve Hang Seng’s brand, heritage, distinct customer proposition and a branch network, while investing to unlock new strengths in products, services, and technology to deliver more choice and innovation for customers. Our offer also represents a significant investment into Hong Kong’s economy, underscoring our confidence in this market and commitment to its future as a leading global financial centre, and as a super-connector between international markets and mainland China.
“This proposal fully meets our criteria for value-accretive investments: it aligns with our strategy, enhances growth and scale, does not distract us from organic growth, and delivers greater shareholder value than buybacks.
“Together, HSBC and Hang Seng form a well-positioned platform with two iconic banking brands working side by side to deliver lasting value for customers, employees, and shareholders.”
A Scheme Document will be sent out later providing further details about the proposal. Its effectiveness depends on certain conditions being met including shareholder approvals and sanction by the High Court.
HSBC Holdings plc is headquartered in London with offices in 57 countries and territories worldwide. As of June 30, 2025, HSBC had assets totaling US$3.2 trillion.
Further information can be found in the Joint Announcement released on October 9, 2025.