Indirect wholly-owned subsidiaries of Thailand's Charoen Pokphand (CP) Group, controlled by the country's richest man Dhanin Chearavanont, have taken over global bank HSBC's 15.6 percent stake in China's Ping An Insurance, one of world's largest insurers with 74 million clients, 175,000+ employees, and about 500,000 agents.
The deal, reportedly backed by state-run China Development Bank, is valued at $9.38 billion - making it Asia's second largest this year behind Chinese oil company CNOOC's planned $15.1 billion purchase of Canada's Nexen. UBS has apparently advised the CP Group on the deal.
CP Group is well known for its agri-business and has large footprints in China. The Group has been tasked to modernise China's agriculture sector under the country's latest 5-year plan. It also runs Lotus super markets in Shanghai.
HSBC has exited from the insurance company primarily to give off its non-core assets and thereby boost its profitability. The bank has taken the approach in the aftermath of the 2008 global financial crisis. For the record, the bank built up its stake in Ping An at a cost of $1.7 billion in the period 2002 and 2005.
HSBC stated that the sale would be complete in stages, subject to approval by the China Insurance Regulatory Commission. Reports said the deal was personally overseen by a three-man team headed by HSBC Group CEO Stuart Gulliver.
"This transaction represents further progress in the executioin of the Group's strategy," Gulliver said in a company statement. "China remains a key market for the group and we will strengthen our focus on growing our own operations and building on our long-term strategic banking partnership with the Bank of Communications."
However, HSBC could also sell its 19.9 percent stake in China's fifth-largest lender Bank of Communications (BoCom).
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