Generali has entered a deal, worth nearly €99m (774m yuan), to acquire the remaining 51% stake in GCI.
The agreement followed a public auction initiated by Generali’s joint venture (JV) partner, CNPC Capital, which was announced by the China Beijing Equity Exchange on 2 November 2023.
With the deal, the Italian insurance giant will assume full ownership of GCI and become the first foreign company to gain a controlling interest in a Chinese P&C insurer through a mandatory public auction.
Generali said the acquisition forms part of its long-term investment to strengthen its position in the burgeoning Chinese insurance market.
Upon gaining full ownership, Generali plans to expand GCI’s distribution network and capitalise on China’s push towards carbon neutrality by growing its green business insurance.
Generali’s relationship with CNPC Capital will continue through their JVs in Generali China Life Insurance Company and Generali China Asset Management Company.
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Generali China Life Insurance Company has reported more than €3bn in gross written premiums in 2022.
UBS served as the financial advisor to Generali for this transaction, while Fangda Partners provided legal counsel.
The deal, which awaits regulatory approval, will have a negative impact of one percentage point on Generali group’s regulatory solvency ratio.
Generali Asia regional officer Rob Leonardi said: “China is the world’s second-largest general insurance market by premiums, with an attractive growth profile. This transaction, which sees Generali obtain full ownership of GCI, will build on the high-quality business that has been developed with CNPC Capital.
“We are confident that together with the management team and employees we can benefit from the various opportunities in this market and become the lifetime partner to even more customers across China.”