HSBC Holdings will acquire a British subsidiary of Silicon Valley Bank (SVB) for only 1 pound.
According to the Guardians on the 12th (local time), HSBC CEO Noel Quinn officially announced the acquisition of SVB UK branch and said, “This acquisition has strategic significance for British business.” According to foreign media, SVB has 5.5 billion pounds in loans and 6.7 billion pounds in deposits. In addition, SVB UK’s tangible assets are estimated to be 1.4 billion pounds.
The unconventional “deal,” represented by the acquisition price of “‘1,” was achieved by British Prime Minister Rishsunak, Interior Ministers and bank officials after overnight negotiations over the weekend to block the “domino impact” of SVB bankruptcy. The meeting was attended by the prime minister and finance minister, House Speaker Andrew Griffith, Bank of England Governor Andrew Bailey and a person in charge of the PRA.
“This morning, the government and the Bank of England sold Silicon Valley Bank UK to HSBC behind closed doors,” British Treasury Secretary Jeremy Hunt said on his Twitter account earlier in the day. “We found a way to protect depositors’ money without a separate tax injection.”
Regarding the negotiations, an official familiar with the matter explained, “We decided to take over (SVB) through a completely ‘competitive’ negotiation process with several parties interested in it.”
SVB’s UK branch has 3,300 UK customers, including major startups and ventures, venture capital (VC) and funds. Most accounts are known to have deposited less than 85,000 pounds, the limit that can be saved by the financial insurance system.