French insurance giant Axa is set to pay 4.6 billion yuan ($662.34 million) for the outstanding 50% stake in its Chinese joint venture with Axa Tianping.
Foreign investors are gaining a foothold in China as it opens its insurance sector up. The Axa announcement comes hot on the heels of German insurer Allianz Group being granted permission to create China’s first wholly-owned insurance holding company by a foreign insurer.
Axa said the Tianping deal makes it the first foreign insurer to own 100% of a top 20 Property & Casualty (P&C) insurance company in China.
“This is a ‘first of its kind’ transaction in the Chinese insurance market whereby a leading P&C insurer, with a nationwide footprint, will be fully owned by a foreign company,” said Axa chief executive, Thomas Buberl.
“The acquisition further reaffirms our conviction that our operations in China will be a key growth engine of the group and in its preferred segments,” he added.
Axa Tianping has 25 branches and 93 sub-branches in China. Gordon Watson, chief executive of Axa Asia said the purchase “will further accelerate the deployment of our strategy to create a leading insurer that champions health care and mobility solutions.”
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This article was originally published in Funds Global Asia.
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