HSBC Insurance Holdings Limited, a wholly-owned subsidiary of the HSBC Group, announced on Monday that it has agreed to acquire an additional 9.91 percent of the issued share capital of Ping An Insurance (Group) Company of China.
The deal, worth HK$8,104 million (US$1,039 million), will increase HSBC's holding in Ping An to 19.90 percent of its issued share capital.
The shares are to be acquired from two of the current shareholders of Ping An, namely, the Goldman Sachs Group and MSCP/PA Holding Limited, an entity controlled by funds managed by the private equity business of Morgan Stanley. The vendors acquired the Ping An shares in 1994.
Under the terms of the agreements, over 613 million Ping An shares will be acquired by HSBC at HK$13.20 (US$1.69) a share, a premium of 9 percent of the price at which Ping An shares closed on the Hong Kong Stock Exchange on May 6, 2005.
However, the transactions are still subject to certain conditions including approval from the China Insurance Regulatory Commission and other approvals as required by regulators.
"Our proposed additional investment in Ping An Insurance demonstrates the confidence HSBC has in the future of the country and we are optimistic about the long-term prospects of the insurance industry on the Chinese mainland," said John Bond, Chairman of HSBC Holdings group.
Ping An Insurance, headquartered in Shenzhen, is a diversified financial holdings group that integrates securities, trusts and banking.
HSBC Group is one of the largest banking and financial services organizations in the world. Last year, it bought 19.9 percent of China's Bank of Communications.
(Xinhua News Agency May 10, 2005)
