Silicon Valley Bank’s UK operations have been acquired by Hongkong and Shanghai Banking Corporation Limited (HSBC), preventing contagion from its parent company in the United States.
The deal between Hongkong and Shanghai Banking Corporation Limited and Silicon Valley Bank’s UK subsidiary was brokered by the government of the United Kingdom (UK).
Join our WhatsApp ChannelHongkong and Shanghai Banking Corporation moved to acquire Silicon after the firm’s parent company in the U.S. declared bankruptcy as soaring inflation and interest rates affect its investment in the US bond market.
Consequently, Silicon Valley Bank in the United States collapsed, with the US authorities seizing the assets of the firm and placing an embargo on the withdrawal of deposits.
While the US operations are still in talks with potential buyers, the UK subsidiary has been sold to Hongkong and Shanghai Banking Corporation Limited for £1 per share.
Hongkong and Shanghai Banking Corporation Limited, OakNorth and Bank of London had bid for the acquisition of Silicon Valley Bank in the UK.
However, the UK government and the Bank of England went with Hongkong and Shanghai Banking Corporation Limited after a private discussion with the firm’s Chief Executive, Noel Quinn.
The UK chancellor, Jeremy Hunt, wrote on Twitter that: “the government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC.”
Hunt also stated that: “Deposits will be protected, with no taxpayer support. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise.”
HSBC’s Quinn said the acquisition will positively affect its operation in the UK, aiding the company’s ability to back innovative and fast-growing firms.
“This acquisition makes excellent strategic sense for our business in the UK. It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life science sectors, in the UK and internationally.”
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