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Swiss RE in talks for CPIC stake
Posted on Thursday, 07 November 2019 14:51
Swiss RE has confirmed it is in talks to acquire shares in China Pacific Insurance (CPIC) after Bloomberg reported the two are in advanced discussions for a possible USD 500.00 million to USD 1.00 billion equity tie-up.

The Zürich-headquartered reinsurance giant said in a statement yesterday it has been “exploring a potential investment opportunity” in a primary offering of securities by the Shanghai- and Hong Kong-listed Asian company.

Zephyr, the M&A database published by Bureau van Dijk, shows the subscription, if it goes ahead, could be among the top 50 deals targeting insurance companies incorporated in mainland China on record.

It would certainly be one of the top ten largest-ever transactions featuring a Western European acquiror investing in the sector in the country, according to Zephyr.

As a leading integrated insurance provider in China, CPIC offers a range of risk, investment and wealth and asset management services to over 100.00 million customers across the country.

It had a group embedded value of CNY 365.12 billion (USD 52.09 billion), as at 30th June 2019, up 8.6 per cent from CNY 336.14 billion as at 31st December 2018.

Gross written premiums for the first six months of 2019 totalled CNY 207.80 billion (H1 2018: CNY 192.63 billion), and attributable net profit soared 96.1 per cent to CNY 16.18 billion (H1 2018: CNY 8.25 billion).

In September, CPIC announced plans to open up its equity base to new investors through a sale of global depository receipts, representing no more than 10.0 per cent of its A-share capital, on the London Stock Exchange.

According to Insurance Journal, the introduction of Swiss Re as an anchor investor would certainly boost the profile of the state-owned insurer ahead of the offering.

However, talks between the two are still ongoing and they have not yet struck a definitive agreement.

Bloomberg reported earlier CPIC is looking to acquire USD 2.00 billion-worth of shares in Swiss Re as part of plans to establish overseas partnerships.

However, the European reinsurance giant rebuffed the claim: “Swiss Re has no current intention of issuing new shares or making treasury shares available to any potential investor.”

© Zephus Ltd