Fosun International Ltd., the Chinese conglomerate and investment company, is considering an acquisition of Belgian re/insurer Ageas in order to expand its international footprint, according to sources at Bloomberg.
The Shanghai-based company is also reportedly discussing alternative options with advisors, such as splitting Ageas with an acquisition partner or increasing its current stake, although no final decisions have yet been made.
Ageas’s market value rose to €9.3 billion (US $10.9) this week after the company won court backing for an amended €1.31 billion settlement with former investors in its predecessor, Fortis, which may clear the way for a takeover.
“Now that Ageas is Fortis free, it could be a compelling target for a Chinese conglomerate willing to expand its activities,” Jason Kalamboussis, an analyst at KBC Securities, told Bloomberg.
“Nevertheless, given its positions as number one in life insurance in Belgium and number two in non-life, there could be some political push back to an outright takeover.”
Fosun currently holds a 3% stake in Ageas, whose share prices increased 5.1% to €49.50 in Brussels this week, although Ping An Insurance (Group) Co. remains the largest shareholder with a 5% stake.
International expansion appears to remain a priority for Fosun despite recent Chinese governmental scrutiny of overseas deals, and the company has already shown interest in insurance acquisitions, having purchased Portugal-based Caixa Geral de Depositos SA’s insurance business for €1.6 billion in 2014.
Fosun also acquired U.S-based Ironshore Inc. for $2.1 billion in 2015, although it sold the company on less than two years later.
In addition to its European operations, Ageas sells products in China, Malaysia, India, Thailand, the Philippines, Laos, Cambodia, Singapore and Vietnam.
Earlier this month, Ageas also received regulatory approval from the National Bank of Belgium (NBB) to begin organising and operating reinsurance activities.
