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HSBC’s sale of French retail business to My Money Group in jeopardy
- Deal ‘less certain’ as a sharp rise in interest rates has increased capital requirements for Cerberus-backed buyer
- HSBC remains committed to the transaction, but completion likely to be delayed if revised deal can be agreed
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Chad Brayin London
HSBC’s sale of its French retail business to Cerberus Capital Management-backed My Money Group is in jeopardy as a sharp rise in interest rates in France has made completing the deal “less certain”, the bank said on Friday.
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The unexpected rise in interest rates since the deal was agreed in June 2021 has “significantly increased” the capital requirements for the buyers at closing, the London-based lender said.
“The purchaser group has advised us that they consider that they will be unable to obtain regulatory approval without amending the previously agreed transaction terms,” HSBC said in a stock exchange filing. “The parties are continuing discussions.”
HSBC said it remained committed to the deal, but closing would likely be delayed if amended terms can be reached. The deal had been expected to be completed in the second half of this year.
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As a result of the increased uncertainty, HSBC said the French retail business would no longer be classified as “held for sale” and a prior US$2 billion impairment related to the sale would be reversed.
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