Ping An Insurance Co, the world’s second-biggest insurer, agreed to buy a further 32 per cent of Shenzhen Development Bank for 29.1bn yuan (£2.8bn) for a controlling stake in the Chinese lender, Ping An said yesterday.
Ping An will fund the deal using cash and by selling its entire 91 per cent stake in Ping An Bank.
The deal will also lead to the merger of Ping An’s banking unit with Shenzhen Development Bank, giving Ping An control of a lender with a total net asset value of 45.74bn yuan.
“The company will gain control of a bank of a larger scale, … optimise the resource allocation of the banking business within the group and contribute to the more balanced development among its three major business segments, namely insurance, banking and investment,” Ping An said yesterday. It already owns around 30 per cent of Shenzhen.
Ping An, which is transforming itself into a bancassurer, is aiming to tap growing demand for financial products in the mainland, where penetration levels of insurance products are among the lowest in the world.
The insurer will buy 1.64bn new shares to be issued by Shenzhen Development Bank at 17.75 yuan each.