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Chinese insurer buys Dutch SNS Reaal's insurance arm

Published: 25 Feb 2015 01:21:14 PST

Chinese insurer buys Dutch SNS Reaal's insurance arm

Passengers walk past an advertisement for Anbang Insurance Group at a subway station in Shanghai, Oct 18, 2012. [Photo/IC]

HAGUE - China's Anbang Insurance Group has acquired Dutch insurance company Vivat from nationalized banking group SNS Reaal, the Dutch Finance Ministry and the bank said Monday.

Under the agreement, Anbang will pay 150 million euros ($171 million) for 100 percent of the shares of Vivat, formerly known as Reaal NV, SNS Reaal said in a statement.

In addition, the Chinese company will inject 770 million to 1 billion euros to recapitalize the insurer and pay off 552 million euros in internal loans to SNS Reaal.

"I am pleased with the results so far," Dutch Finance Minister Jeroen Dijsselbloem said in a separate statement.

"This agreement provides clear perspective on Reaal, its employees and its policyholders. They just remain customer of Reaal Insurance (Vivat) and preserve their rights. The agreement with the wealthy Anbang will strengthen the position of Reaal," he added.

Due to major losses of its real estate branch Property Finance, SNS Reaal was nationalized by The Netherlands in early 2013.

As part of the restructuring plan, Property Finance was separated from SNS Reaal in December 2013. Since then, SNS Reaal has also been looking for a buyer of its insurance arm.

The deal between Anbang and SNS Reaal is subject to approval by Dutch and Chinese regulatory authorities, which is expected to be completed in the third quarter of 2015.

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Anbang plans acquisitions around world, by Bloomberg

Wu Xiaohui, the head of the Chinese firm buying New York's Waldorf Astoria Hotel, told Harvard University students of his friendship with Blackstone Group LP Chief Executive Officer Steve Schwarzman, his plans for deals around the globe, and the value of knowing how to say "ni hao."

Little known before last year's deal for the landmark property, Anbang Insurance Group Co has transactions pending in Europe, Asia, Oceania and Africa, its Chairman and Chief Executive Wu said in a question-and-answer session at a Jan 31 Harvard recruitment event, according to a transcript posted on the People's Daily website on Wednesday.

Staff members hunting for investments have "accumulated enough mileage to travel to the moon twice," Wu said.


His latest move is in South Korea, where Anbang signed a memorandum of understanding to buy Vogo Fund's 57.5 percent stake in Tongyang Life Insurance Co for 1.1 trillion won ($1 billion), according to a Korea Economic Daily report on Thursday. No comment was immediately available from Vogo or Anbang.

The businessman described Schwarzman as "a good friend", citing the Blackstone head's involvement in financially supporting an institute at Beijing's Tsinghua University that has also received money from Anbang.

The Blackstone-owned Hilton Worldwide Holdings Inc is selling the Waldorf to Anbang for $1.95 billion, a deal that received US regulatory approval this month.

Anbang has also attracted attention for becoming the biggest shareholder of China Minsheng Bank Corp, whose president resigned after a media report that he was under investigation. The Beijing-based Anbang is planning an initial public offering that could raise about $2 billion, people familiar with the matter said in November.

The businessman's talk at Harvard spanned topics from his wish for Anbang employees around the world to speak some Chinese - at least "ni hao", the usual Chinese greeting - to his ambitions for the company to within a decade have its own firms on every continent, with listings in many nations.

In pursuing deals, Anbang seeks to pay below book value for companies that generate a return on equity of more than 10 percent, Wu said, according to the transcript.

He contrasted the Waldorf purchase favorably with the cost of property in Beijing's financial district.

Anbang was founded in 2004 with shareholders including State-owned enterprises SAIC Motor Corp and China Petroleum & Chemical Corp, known as Sinopec. The company is one of China's "largest insurance conglomerates", with assets of more than 700 billion yuan ($112 billion) and in excess of 30,000 employees and 3,000 outlets, according to its website.

Anbang's buying spree has included acquiring Belgian insurer Fidea NV and Belgian banking operations of Delta Lloyd NV.

In China, the firm's stakes have spanned property companies China Vanke Co and Gemdale Corp, China Merchants Bank Co, and Financial Street Holdings Co, a developer of financial-district properties in Beijing.

Anbang's 35 percent stake makes it the biggest shareholder in Chengdu Rural Commercial Bank Co, a lender in Sichuan province that had 429 billion yuan of assets at the end of 2013, according to its annual report.

Anbang paid 5.6 billion yuan for the holding in 2011, consolidating the bank into its financial statements at a time when its own assets were a fraction of the lender's, according to Caijing magazine.

In his comments at Harvard, Wu said the bank's bad-debt ratio had fallen to 0.85 percent from 18 percent when Anbang bought in, and the lender consistently reported a return on equity of more than 20 percent.

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