Banking
Ping An gets approval for Shenzhen bank purchase
(Agencies/chinadaily.com.cn)
Updated: 2010-02-27 13:51
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In what might be the biggest acquisition in China, Ping An Insurance (Group) Company won approval from the State Council, China's cabinet, for acquisition of Shenzhen Development Bank (SDB), the Economic Observer reported.
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The merger will be supervised by the China Banking Regulatory Commission (CBRC), China's banking watchdog. Ping An is required to complete the deal before April 30.
It is widely believed that the smaller Ping An Bank would be annexed by SDB. However, a senior executive of the insurer told the newspaper on condition of anonymity that SDB may become part of Ping An Bank and stop existing as an independent entity.
The insurer could only retain one brand for its banking operation, as required by regulators.
Ping An agreed in June to subscribe to new shares in the bank via a private placement and buy the entire stake held by SDB's largest shareholder, financial sponsor Newbridge Capital, either for cash or through a share swap. Following the two transactions, Ping An will own no more than 30% of the bank. Ping An will pay up to $3.2 billion for the stake if it pays entirely in cash.
