Marking its re-entry into
China’s life insurance market, US investment bank Goldman Sachs has
bought a 12.02% stake in the country’s fifth-largest life insurer,
Taikang Life.
The vendor in the deal is
Axa, which received the go-ahead from the China Insurance
Regulatory Commission to sell its 15.6% stake in Taikang Life in
early-March.
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Based on Axa’s statement that
the consideration for entire holding in Taikang Life is $1.2bn,
Goldman Sach’s has paid around $925m for its stake in the Chinese
insurer.
Taikang has total assets of
around $44bn.
In 2006, Goldman Sachs and
Morgan Stanley sold their combined 9.91% stake in China’s second
largest life insurer, Ping An, to UK bank HSBC for
$1.04bn.
The stake had been acquired
in 1994 at a cost of $35m to each of the investment
banks.
Axa’s stake in Taikang Life
was acquired through Swiss insurer Winterthur, which the French
insurer bought in 2006 from Credit Suisse Group.
Axa retains an exposure to
China’s life market through its stake in Axa-Minmetals, a joint
venture with Chinese conglomerate Minmetals and Industrial and
Commercial Bank of China (ICBC).
Axa reduced its stake in
Axa-Minmetals in 2010 from 49% to 26% through the sale of a portion
of its holding to ICBC.
According to Taikang, it
generated premium income of almost CNY87bn ($13bn) in 2010, an
increase of 29% compared with 2009.
The insurer achieved a market share of around 8% in
2010.
