HSBC Insurance and HSBC Asia Pacific have agreed to dispose of their entire 15.57% shareholding in Ping An Insurance (Group) Company of China to Thailand’s Charoen Pokphand (CP) group for HK$72.7bn ($9.38bn).
Under terms of the deal, CP group’s four indirect wholly-owned subsidiaries, All Gain Trading, Bloom Fortune Group, Business Fortune Holdings and Easy Boom Developments, will acquire the stake.
HSBC Group chief executive Stuart Gulliver said, "China remains a key market for the Group and we will strengthen our focus on growing our own operations and building on our long-term strategic banking partnership with the Bank of Communications."
First phase of transaction will close on 7 December, while the second transaction will take place only after receiving regulatory approval from the China Insurance Regulatory Commission.
The bank said that the agreement is a part of its strategy to review its global operation and the earnings from the deal will be used to support further implementation of its overall strategy.
HSBC had purchased a 10.1% interest in Ping An for $600m and doubled its stake in 2005 after agreeing to pay $1.1bn for an additional 9.9% of the company’s share capital.
The total stake was reduced to 15.6% when the bank rejected to a rights issue subscription in 2010, as reported by Reuters.
Ping An offers a variety of products which include fire, marine cargo and accident insurance, as well as a home protection plan.