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Morgan Stanley (MS.N) received approval to sell its 34.3% stake in China International Capital Corp (CICC), China's top investment bank, to TPG Capital, KKR, Government of Singapore Investment Corporation and The Great Eastern Life Assurance Company Limited.
Morgan Stanley expects to realize a pre-tax gain of approximately US$700 million ($920.7 million) upon consummation of the transaction, which is expected to close before the end of 2010.
Morgan Stanley has been trying to sell its stake in CICC for several years now, and indicated as early as 2007 its intent to form a new investment banking joint venture with China Fortune Securities.
However, since China's securities rules forbid foreign companies from having more than one joint venture at a time in the country, it had to put those plans on hold pending the sale of its CICC stake.
Morgan Stanley and China Construction Bank, together with other Chinese and international financial institutions and corporations, jointly established CICC in 1995.
