HSBC has agreed to buy 51% of Korea Exchange Bank from private equity firm Lone Star for $6.3 billion, in a deal that could propel the UK-based bank into the top ranks of Asia's third-largest banking market.
The $6.3bn (£3.1bn) deal is dependent on regulatory approval and complex legal and government hurdles being met by next year.
HSBC has tried repeatedly to buy a bigger presence in South Korea, the deal will boost its clout after peers Standard Chartered became key players by buying local rivals.
But the protracted legal tussle over the 2003 acquisition of KEB - which led Lone Star to scrap a $7.3 billion deal with local bank Kookmin last year and prompted another buyer to end talks - could again throw a spanner in the works.
HSBC, which first confirmed talks with Lone Star two weeks ago, said the purchase was conditional on receiving necessary approvals by April 2008.
The price will increase by $133m if the deal is completed after January 2008.
