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ICBC (Asia) will acquire a 24.9percent interest in Tai Ping Insurance (TPI) for a total consideration of the Hong Kong dollar equivalent of 186.75 million yuan (22.55 million U.S. dollars) in equal proportions from both China Insurance International Holdings Company Limited (CIIH) and China Insurance Company Limited (CIC).
CIIH and CIC, the parent company of the China Insurance group, Tuesday signed a general insurance partnership agreement with ICBC(Asia), a subsidiary of the Industrial and Commercial Bank of China (ICBC), for the transaction.
On completion of the transaction, CIC will retain a majority ownership in TPI with 45.05 percent, with CIIH owning 30.05 percent and ICBC (Asia) owning 24.9 percent.
ICBC (Asia) has the option to increase its participation to 49 percent subject to implementation of new regulations following China's entry into the World Trade Organization. The transaction is subject to Chinese regulatory and other approvals.
The purpose of the partnership is to build a major and highly successful general insurance business in China. ICBC (Asia) expects to bring to the venture its banking expertise and distribution capability in China via its parent company ICBC.
TPI is a general insurance company with a national license in the People's Republic of China, and part of the China insurance group. CIC, the former sole investor of TPI, transferred a 42.5 percent interest in TPI to CIIH, its listed Hong Kong subsidiary.
Zhu Qi, managing director and chief executive officer of ICBC (Asia), said, "We are delighted with this partnership which will allow us to participate actively in a sector with high growth potential."
"Through TPI, ICBC (Asia) will benefit from the synergies created in the areas of product development, sales marketing and customer service. We are convinced that the great potential and rapid growth of the insurance market in China can also enhance theprofitability of ICBC (Asia) and therefore increase the ROE of theBank in the long term," he added.
(People's Daily March 27, 2002)
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