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June 16, 2022updated 17 Jun 2022 10:37am

ABC Life Insurance’s minority shareholders looking sell stake

The minority stakeholders of Chinese insurance firm ABC Life Insurance are looking to sell their stake, Bloomberg has reported citing unknown sources. 

The investors are in talks with financial advisers for the potential divesture of the stake, the sources added. 

Chinese government-backed Agricultural Bank of China holds a controlling stake in the life insurer. 

The minority shareholders hold around 49% stake in ABC Life and the deal could value the entire business up to $4bn, the report says. 

ABC Life’s minority shareholders include Beijing Zhongguancun Science City Construction Holdings, Tibet Tengyun Investment Management and China New Era.

According to the sources, both international and domestic banks, insurers and funds have expressed preliminary interest in acquiring a stake in ABC Life to expand operations in China. 

The talks are at an early stage and there is no guarantee that a deal will materialise.

The insurer’s minority shareholders could divest between 20% and 40% of their stake.

The transaction could also include a bancassurance agreement, which would allow ABC Life to sell insurance policies through the bank’s branches and other channels for an agreed duration.

In 2012, the Chinese bank acquired a 51% stake in ABC Life, before that, it was known as Jiahe Life Insurance.

The insurer is engaged in offering various types of personal insurance such as life insurance, health insurance and accident insurance. It also offers reinsurance services. 

According to the Agricultural Bank of China’s 2021 annual report, as of 31 December 2021, ABC Life’s total assets stood at RMB125.57bn and it recorded a net profit of RMB884m last year.

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