China-based Fosun International has won the competitive bid to purchase insurance group Caixa Seguros from Portugal government, in a transaction valued at approximately €1bn.
Portugal deputy finance minister Manuel Rodrigues was quoted by the Wall Street Journal as saying that the government preferred Chinese Fosun over US-Apollo Global Management.
Fosun agreed to maintain the unity of the group and also committed to boost the presence of all these companies in Africa and Asia, Rodrigues told the news agency.
Under the terms of the agreement, Fosun will acquire 80% of the share capital and voting rights of each of these firms including Companhia de Seguros, Seguros de Saúde and Companhia de Seguros, which are wholly-owned subsidiaries of Caixa Seguros e Saúde (CSS).
The divestment is a part of Portugal government commitment to divest state-owned businesses under the terms of its three-year bailout program.
In addition, the Chinese firm will also purchase shares representing up to 5% of the share capital and voting rights of Fidelidade at the same price it has paid for shares of Fidelidade.
Commenting on the proposed acquisition, Fosun chairman Guo Guangchang said "This marks a solid step for Fosun to evolve into Warren Buffett’s model."
Financial terms and conditions pertaining to the acquisition are expected to be finalized in the sale and purchase agreement and related ancillary agreements.
CSS was established in 1835 and operates as one the largest insurance holding company in Portugal. It is the insurance arm of state-owned bank Caixa Geral de Depósitos (CGD) in the country.
Image: Caixa Geral de Depósitos’ headquarters in Lisbon. Photo courtesy of Jcornelius.