HSBC Plans To Privatize Hang Seng At $37 Billion Valuation

HSBC Holdings Plc plans to take Hang Seng Bank Ltd. private in a deal that values the lender at $37 billion, ramping up its exposure to Hong Kong as the financial hub attempts to bounce back from years of economic turbulence.

The price was set at HK$155 ($19.92) a share in cash, a premium of about 30% over the last closing price, HSBC said in a statement on Thursday. The publicly listed shares would be canceled under the proposal.

“The proposal represents a significant investment into Hong Kong, which underlines our confidence in the growth potential for both HSBC Asia-Pacific and Hang Seng,” HSBC said. “The proposal will unlock opportunities for further investment and improvements in operational leverage.”

HSBC, based in London, currently owns about 63% of Hang Seng Bank and will spend about $14 billion buying up the shares it doesn’t already hold. The lender plans to refrain from share buybacks in the coming three quarters as it seeks to restore its capital ratio to its operating range.

The move to purchase the rest of Hang Seng Bank “delivers greater shareholder value than buybacks,” Chief Executive Officer Georges Elhedery said in the statement.

The deal comes as Elhedery has undertaken the biggest overhaul of the bank in at least a decade. The lender has also over the past years pivoted to Asia, closing and selling off businesses across Europe and North America.

The buyout would represent a major bet on Hong Kong at a time when the city is seeing a resurgence in stock listings and other dealmaking, much of it driven by companies based in mainland China. President Xi Jinping has sought to tap Hong Kong’s financial industry to fuel his industrial priorities, with companies spanning electric vehicles and artificial intelligence using the city to raise funding for global expansion.

Still, the proposal comes at a time when the Hong Kong banking sector is battling stress from the worst real estate slump since the Asian financial crisis in the late 1990s. There have even been discussions in the sector of creating a “bad bank” to take over the soured loans, which Fitch Ratings estimates at about $25 billion, based on Hong Kong Monetary Authority data. 

HSBC has been pushing Hang Seng to offload its pile of bad commercial real estate debt. Its credit-impaired loans to the sector rose to HK$25 billion ($3.2 billion) as of June 2025, an 85% jump from a year earlier. 

Elhedery has reorganized HSBC into four new divisions and exited some businesses his predecessors once considered key to the lender’s future, and is doubling down in markets such as Greater China and the Middle East. HSBC has already handed out multi-billion dollars to shareholders in the past year, much of it in the form of stock buybacks, which have become one of the bank’s preferred ways to distribute capital to its investors.