HSBC is stepping into the South Korean banking market by agreeing to buy 51% of Korea Exchange Bank (KEB).
The $6.3bn (£3.1bn) deal with private equity group Lone Star is dependent on a raft of complex legal and government conditions being met by April 2008.
HSBC also agreed to pay $133m extra if the deal is not completed by January.
Lone Star paid just $1.2bn for the stake in 2003, but it is now embroiled in an investigation into allegations that it bought the holding too cheaply.
Prosecutors allege that a former government official colluded with Lone Star's lawyer and KEB's chief executive to inflate KEB's losses and reduce the price.
South Korea's Financial Supervisory Commission says it will not approve the sale of the stake until all legal issues have been resolved.
SOURCE: BBC
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