Oversea-Chinese Banking Corp Ltd (OCBC) has offered to pay almost $5 billion for one of Hong Kong's last remaining family-owned banks, in a deal that would give the Singapore lender a much sought-after gateway to China.

The deal to buy Wing Hang Bank Ltd was preceded by months of negotiations, with the deadline for an agreement extended not once, but twice. OCBC formally made the offer to purchase the Hong Kong-based lender after reaching a deal with major shareholders.

OCBC, like other foreign lenders, are drawn to China's economic clout and the growth of its offshore yuan markets. Wing Hang has branches in Shenzhen, Guangzhou and Macau - major hubs in the prosperous and bustling Pearl River Delta.

The acquisition, OCBC's biggest, would also help the Singapore lender narrow the gap with domestic rival DBS Group Holdings, which operates Hong Kong's sixth-biggest bank by assets.

At the same time, China's economic growth is slowing, prompting concerns about Hong Kong's loan exposure to mainland companies, particularly those in industries that are suffering.

OCBC would also be entering a highly competitive space dominated by mainland banks and global lenders such as Standard Chartered PLC and HSBC. OCBC said it would retain the name of Wing Hang, founded in 1937.

Still, Wing Hang's sale process had attracted interest from suitors including Agricultural Bank of China, Australia and New Zealand Banking Group and Singapore's United Overseas Bank.

OCBC is offering HK$125 ($16.11) a share to buy all the stock of Wing Hang.

Reuters