A CONGLOMERATE controlled by Thailand’s richest man has bought a minority stake in China’s Ping An Insurance for $9.38bn (£5.83bn) from HSBC in a move that ranks as Asia’s second-largest deal this year.
CP Group bought the 15.6 per cent stake in a deal that marks a departure from its core food businesses, such as poultry and animal feed.
The deal appears to strengthen billionaire Dhanin Chearavanont’s ties to Beijing.
Dhanin already has major business interests in China ranging from agriculture to retail to auto manufacturing, and the state-run China Development Bank financed part of the deal.
The sale forms part of HSBC’s recovery plan to sell non-core assets.
The bank said it should make a post-tax gain of $2.6bn on the deal, and analysts praised the move.
“The investment in a Chinese insurer branching into pan-financial services has looked at odds with management’s focus ever since the new strategy was launched in 2011,” said Chirantan Barua, an analyst at Bernstein Research.
Meanwhile others cast doubt on the value CP Group could gain from the purchase.
“This is phenomenal for HSBC shareholders because the bank is now sitting on at least $8bn in profit,” said Jim Antos, from Mizuho Securities.
“I am not sure what CP Group would do with the stake though.”
City A.M. Reporter