Bank of America to Pay $7 Billion for China Construction Stake

Bloomberg reports on Bank of America’s decision to invest $7 billion into China Construction Bank:

Bank of America, which is buying Merrill Lynch & Co., will boost the stake in China’s No. 2 bank to 19.13 percent from 10.8 percent, the Charlotte, North Carolina-based lender said today. It will buy shares from China SAFE Investments Ltd., a state investment arm that is the Beijing-based bank’s biggest stakeholder.

Bank of America isn’t funding the purchase with proceeds from the government’s Troubled Asset Relief Program, or TARP, said spokesman Scott Silvestri. Merrill received $10 billion through the Treasury’s $250 billion bank-rescue package. …

Bank of America first invested in China Construction in June 2005, buying a $3 billion stake before the lender was publicly listed. It invested another $1.9 billion in June. The value of its holding almost tripled, to $14.5 billion, as of Sept. 30, a regulatory filing showed.

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