Deal could fetch the French insurer around $1 billion
AXA, a France-based insurer, has started selling its 15% stake in Taikang Life Insurance, a China-based company. The French insurer is likely to gain upto $1 billion from this deal, reported Reuters.
Morgan Stanley is acting as the advisor regarding the sale of the stake. The auction is expected to attract several large corporate and private equity suitors.
AXA had purchased Switzerland-based, Winterthur in 2006. The purchase led to the 15% stake in Taikang.
Reportedly, the bidding of AXA’s stake in Taikang highlights the insurer’s weak control over the management decisions of Taikang that gets reflected as Taikang pursues an initial public offering.
After investing and building up partnerships for years in China, some of the foreign shareholders are giving a second thought to their strategy as minority shareholders in Chinese firms often have less authority at top management levels.
BNP Paribas had decided to end its roughly five-year partnership with China’s Changjiang Securities in early 2007, due to disagreements in business direction between the two parties. Moreover, several US and European banks have bid their stakes in Chinese financial groups to raise cash and exit partnerships in which they had less authority, quoted the news agency.