Axa agrees to buy 50% of China’s Tian Ping for $631 million

Axa will buy 33% of Tian for €237 mn, will also invest €248 mn in a capital rise to support future growth

Fabio Benedetti-Valentini
First Published24 Apr 2013
Axa&#8217;s other Chinese property and casualty businesses will be integrated into the new joint venture. Photo: Mint<br />
Axa&#8217;s other Chinese property and casualty businesses will be integrated into the new joint venture. Photo: Mint(Mint)

Paris: Axa SA, Europe’s second-largest insurer, agreed to acquire a 50% stake in Chinese auto insurer Tian Ping in a deal valued at €485 million ($631 million) as it expands in Asia.

add_main_imageAxa will buy 33% of Shanghai-based Tian Ping from its existing shareholders for €237 million, and it will also invest €248 million in a capital increase to support future growth, the Paris-based insurer said in an e-mailed statement on Wednesday. Axa’s other Chinese property and casualty businesses will be integrated into the new joint venture.

“The deal is another stepping stone towards our ambition to accelerate further in high-growth markets,” chief executive officer Henri de Castries said in the statement.NextMAds

Axa rose as much as 2.5% in Paris trading and gained 2.4% to €13.98 by 11:21 am local time. The shares have risen 4.6% this year, trailing the 7.4% increase of the 28-member Bloomberg Europe 500 Insurance Index.

In July, Axa won approval from regulators to start a life- insurance venture with Industrial & Commercial Bank of China Ltd. Since 2010, Axa has freed up billions of euros in capital in countries such as the US, Canada and the UK while expanding in Asia and other emerging markets.

Tian Ping, created in 2004, has more than 5,000 employees at 62 offices in 18 Chinese provinces. It also has a license to sell insurance over the Internet, which represented about 20% of its premiums in 2011, according to the statement.

Tian Ping’s total premiums in 2011 rose to €447 million, up 28% from a year earlier, according to the statement. The company’s premiums represent 0.8% of China’s property and casualty market. Tian Ping had a 2011 profit of €28 million. Bloomberg

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