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September 23, 2022

Prudential Financial eyes stake in ABC Life for China expansion

US insurer Prudential Financial is exploring the option of acquiring a minority stake in China-based ABC Life Insurance, reported Bloomberg citing sources privy to the development. 

The size of the stake to be divested may vary between 20% and 49%, according to the sources. The transaction may also include a “bancassurance deal”.

Prudential Financial is reportedly in talks with a financial adviser in this regard.

Investors having a stake of around 49% in ABC Life are looking to offload a minority interest, reported the news agency.

A deal, if materialised, would value the life insurance business at nearly $3-4bn.

The offer in ABC Life, a firm controlled by Agricultural Bank of China, has attracted the attention of other financial institutions as well, the sources said.

As per the sources, the discussions on the stake sale are ongoing and have no certainty of success. New bidders could also surface.

Representatives from Prudential Financial and ABC Life did not give any official confirmation on the matter.

Through the potential transaction, Prudential Financial seeks to expand its presence in China.

The company along with a subsidiary of China Everbright Group already has a joint venture in the country. It also operates a venture with Fosun Group, an investment firm in China.

ABC Life provides a wide range of offerings including life, health and accident insurance, as per AgBank’s annual report.

Some of its minority shareholders include Beijing Zhongguancun Science City Construction Holdings, Tibet Tengyun Investment Management and China New Era.

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