Morgan Stanley, the sixth-largest U.S. bank by assets, said it has received all required regulatory approvals for the sale of its 34.3% holding in China International Capital Corp., clearing the way for the stake’s sale to four investors.

Morgan Stanley expects to realize a pretax gain of about US$700 million (920.7 million) upon consummation of the transaction, which is expected to close before the end of 2010, the New York-based bank said today in a statement. Morgan Stanley is selling the stake to Kohlberg Kravis Roberts & Co., TPG Capital, Great Eastern Holdings and a Singaporean sovereign wealth fund.

 

The sale will end Morgan Stanley’s 15-year involvement in CICC, the first Sino-foreign investment bank and the top-ranked underwriter of share sales in the country. The U.S. firm, which ceded management control of CICC a decade ago, plans to form a partnership with Shenzhen-based China Fortune Securities Co.

 

“Given the impressive economic and market developments and business opportunities, China remains a critical part of Morgan Stanley’s global strategy,” Morgan Stanley Chief Executive Officer James Gorman said in the statement. “Our focus now is to further expand our domestic market platform and capabilities.”

 

Morgan Stanley plans to sell stakes of about 10% each to TPG and KKR, and about a 5% stake to Singapore’s Great Eastern, the insurer controlled by Oversea-Chinese Banking Corp., four people with direct knowledge of the deal said earlier this month. Government of Singapore Investment Corp. will buy the remainder, the people said. The 34.3% stake is valued at about US$1 billion, two of the people said.