Insurance Australia Group (IAG) has agreed to buy a 24.9% stake in China Pacific Property Insurance (CPPI), a unit of China's biggest privately-owned insurer, for as much as $279 million.

The Sydney-based insurer said that it has signed a memorandum of understanding with CPPI and draft transaction agreements have been lodged with the Chinese Insurance Regulatory Commission for preliminary review. IAG said in February that it had agreed to buy the stake.

Australia’s largest home and auto insurer is seeking to expand overseas as the company is restricted from further growth for antitrust reasons, already holding more than 40% of Australia’s auto and home market. IAG already has assets in Asia with businesses in Thailand, Malaysia and Singapore.