BNP Paribas, the eurozone’s biggest bank, has agreed to buy a 9 per cent stake in Ageas from China’s Fosun Group for about US$780 million, making it the biggest shareholder in the Belgian insurer.
The deal ends months of speculation about the future of Fosun’s direct and indirect holdings in Ageas as the Chinese conglomerate speeds up asset sales to reduce its debt burden after an acquisition spree.
The acquisition, to be made via the insurance division BNP Paribas Cardif, also fits BNPP’s strategy of developing its insurance business.
The French lender’s US$16.3 billion sale last year of its US retail activities has left it with funds for acquisitions.
“We see the strategic rationale for a combination of banking and insurance, especially in the Belgian market where the savings market favours products in insurance wrappers,” said Johann Scholtz, an analyst with Morningstar.
“We are however not convinced that a small portfolio investment in Aegeas is the best strategy to exploit Belgian bancassurance,” he added.
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Ageas’ shares were up by more than 3 per cent in morning trading while BNPP’s were close to 1 per cent higher at 1040 GMT.
BNP Paribas has repeatedly said it was open to bolt-on acquisitions. It bought 5 per cent of French listed insurer Scor last October for an undisclosed amount, according to a regulatory filing.
Ageas and BNP Paribas are long-time partners via a joint shareholding in AG Insurance, Belgium’s leading insurer, in which Ageas owns 75 per cent and BNP the remainder.
Last month, Ageas dropped plans to buy Direct Line after the British home and motor insurer turned down a revised US$3.95 billion takeover bid.
BNPP’s statement on the size of the stake and value of the deal differed slightly from a separate statement by Fosun.
BNPP said it would acquire a first 4.8 per cent tranche in coming days, with the rest of the 9 per cent stake to be bought after receiving regulatory approvals.
Fosun International said in a filing to the Hong Kong Stock Exchange that it agreed on April 12 to sell shares equivalent to an 8.19 per cent stake in Ageas for up to 670 million euros (S$971.2 million).
The Chinese company said it intended to use proceeds of the sale for general working capital.
“The disposal is part of the company’s effort of streamlining its portfolio and implementing core business-focused strategy. It also demonstrates the group’s continuous determination on improving its financial performance and creating maximum value for its shareholders,” Fosun said.
Fosun said it would still hold 1,952,524 shares in Ageas after the sale, equivalent to a stake of about 1 per cent. REUTERS
