China says approves HSBC sale of Ping An stake

February 01, 2013 - 2:26:00 pm
SHANGHAI: China's insurance regulator said Friday it had approved British bank HSBC's sale of its 15.57 percent stake in Ping An, the country's second largest life insurer, to a Thai conglomerate in a $9.4 billion deal.

The green light from the China Insurance Regulatory Commission (CIRC) came just hours before a deadline for approval, and followed media reports that the deal might collapse.

HSBC confirmed that it had received approval and said it would complete the transfer of its shares to subsidiaries of Charoen Pokphand Group, owned by Thai tycoon Dhanin Chearavanont, on February 6.

"We have been informed that CIRC approval was granted today," HSBC said in a statement.

Hong Kong media had reported that Chinese regulators were ready to reject the bid over concerns about funding for the purchase.

Analysts see the deal, which was announced on December 5, as way for HSBC to shift back towards its traditional banking business.

Ping An, an insurance and financial services conglomerate, has previously said it did not plan any changes in strategy as a result of having a new stakeholder.

Ping An hit the headlines last year after the New York Times said that Chinese Premier Wen Jiabao's relatives benefited ahead of its 2004 Hong Kong listing by buying stock at a discount. It did not accuse Wen of any wrongdoing.

Ping An Insurance closed up 5.29 percent to 50.77 yuan ($8.15) in Shanghai trading on Friday ahead of the announcement, and rose 1.87 percent to HK$70.85 ($9.13) in Hong Kong. (AFP)