HSBC Offloads Ping An Stake for HK$72.712-05 15:36 Caijing
HSBC Holdings LPC (00005.HK) has sold all of its 15.57 percent of holding in Ping An Insurance (Group) Co., (02318.HK) to Thailand Chia Tai Group, the bank said in a filing to the HKEs on Wednesday.
Chia Tai, owned by billionaire Dhanin Chearavanont, has agreed to pay 72.74 billion Hong Kong dollars in cash for the stake, according to the filing. The price, which equals to 59 Hong Kong dollars a share, represents a 2.3 percent premium to Ping An's closing price of 57.65 on Tuesday.
The initial transaction is expected to be completed on Friday, and the second
HSBC Group Chief Executive Stuart Gulliver said in the statement that the Ping An sale would benefit shareholders, but added that China remained "a key market for the group."
The bank has been selling or closing weak businesses as part of a broader restructuring plan designed to improve its profitability as lenders worldwide struggle with weak economic growth and stricter regulation following the global financial crisis.
Shares of Ping An were up 2.25 percent at 58.95 Hong Kong dollars on Wednesday morning, while it rose 2.7 percent to 38.38 yuan in Shanghai.
HSBC announced on November it was in discussions about a possible sale of its entire stake in the Chinese second-largest insurance group. That triggered speculations whether the London-listed lender would sell its its another big shareholding in china: its 19.9 percent stake in Bank of Communications, China's fifth largest lender.
The firm would "strengthen our focus on growing out own operations and building on our long-term strategic banking partnership with the Bank of Communications," said Stuart Guilliver.
HSBC acquired stakes in Ping An in 2002 and 2005, for only over 1.6 million U.S. dollars.
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