HSBC agrees to sell stake in Chinese insurer Ping An to Thailand’s Charoen in $9.4bn deal

HSBC

British banking and financial services group HSBC Holdings Plc (LON:HSBA) on Wednesday announced a HKD72.74bn (USD9.4bn/EUR7.2bn) agreement for the sale of its 15.57% in Chinese insurer Ping An Insurance (Group) Company of China Ltd (HKG:2318).

The buyer is Thai diversified group Charoen Pokphand Group Company Limited (CP Group) which is carrying out the deal through indirectly fully-owned units All Gain Trading Limited, Bloom Fortune Group Limited, Business Fortune Holdings Limited and Easy Boom Developments Limited.

Under the terms of the transaction, HSBC will transfer a first tranche of 256.7m Ping An shares, or 20.8% of the shares, to the buyers on 7 December for HKD59.00 apiece in cash, while the rest of the stock will be delivered at the same price per share after securing the approval of China Insurance Regulatory Commission (CIRC) in January 2013, the vendor said.

HSBC said the sale is part of its strategy of delivering long-term value to shareholders. It expects the disposal to boost its core Tire 1 capital ratio by some 0.5% and the total capital ratio by around 1% based on ratios on 30 September 2012. The vendor plans to use the funds from the divestment to support the group’s overall strategy, HSBC said.

The buyer will finance the deal with cash and a debt facility from the China Development Bank Corporation (CDB).

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