HONG KONG -- Ping An Insurance Co Ltdm China's second-largest life insurer, has agreed to pay more than 2.15 billion euros ($3.37 billion) for 50 percent of Fortis' asset management business, sources with knowledge of the deal said, in the latest overseas investment by a Chinese financial firm.
As part of the deal, expected to be announced later on Wednesday, Ping An has also raised its stake in the Belgian-Dutch financial group to 4.8 percent from 4.18 percent, one of the sources added.
Both Ping An and Fortis declined to comment.
The deal expands the existing relationship between Fortis and Ping An, which is the European firm's largest shareholder, and builds on Ping An's three-pronged strategy to grow its insurance, banking and asset management units.
Shareholders in Ping An recently agreed to allow the firm to raise about $16 billion through one of the world's biggest corporate fund raisings — a war chest the company has said it aims to use in part for acquisitions.
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Fortis, meanwhile, is eager to bolster its financial position after announcing earlier this month that its profit halved in the fourth quarter following a 1.5 billion euro subprime-related writedown.
"This aligns with Ping An's business strategy, as it wants to invest in European assets and expand its securities and trust business," said CLSA analyst Dominic Chan.
Sources said last week that the Wednesday deal was in the works.
Cashed-up thanks to furious growth in their fast-expanding home market, Chinese financial giants have been avidly making investments overseas in order to tap new markets and acquire know-how.
Chinese institutions have bought big stakes in western financial institutions over the past year.
Last year, Industrial and Commercial Bank of China paid $5.6 billion to buy 20 percent of South Africa's Standard Bank (SBKJ.J: Quote, Profile, Research) in the biggest foreign acquisition by a Chinese commercial bank.
Merrill Lynch was advising Fortis on the deal, and JP Morgan was representing Ping An, sources have said.
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