Fosun Considers Takeover of $10 Billion-Insurer Ageas

(Bloomberg) -- Fosun International Ltd., the Chinese group backed by billionaire Guo Guangchang, is considering an offer for all or parts of Belgian insurer Ageas in what could be its boldest move to expand its international footprint, people familiar with the matter said.

Shanghai-based Fosun is talking to advisers about alternatives including teaming up with a partner to split the Brussels-based company or increasing its current stake, the people said, asking not to be identified because the deliberations are private. No final decisions have been made and Fosun may decide against pursuing a deal, they said. Representatives for Ageas and Fosun declined to comment.

Shares of Ageas jumped to their highest in almost a decade on Wednesday, giving the company a market value of about 9.3 billion euros ($10.9 billion). The country’s biggest life insurance provider this month won court backing for an amended 1.31 billion-euro settlement with some former investors in its predecessor, Fortis, helping bring to a close a battle with roots in the global financial crisis and clearing the decks for a takeover. Still, a potential deal could draw scrutiny from regulators globally because of Ageas’s prominent role in Belgium’s financial sector and its far-flung operations.

“Now that Ageas is Fortis free, it could be a compelling target for a Chinese conglomerate willing to expand its activities,” according to Jason Kalamboussis, an analyst at KBC Securities. “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 has continued to expand its international business empire amid a Chinese crackdown on overseas deals in some industries that’s forced other conglomerates like Anbang Insurance Group Co. to shed assets. This year, Fosun announced deals for Brazilian brokerage Guide Investimentos and French fashion house Lanvin.

Its biggest overseas forays abroad have been in insurance. The company bought control of Portugal-based Caixa Geral de Depositos SA’s insurance business in a roughly 1.6 billion-euro deal in 2014, data compiled by Bloomberg show. It also acquired U.S.-based Ironshore Inc. in 2015 for $2.1 billion and then sold it less than two years later.

Close Scrutiny

Fosun already holds about 3 percent of Ageas, though Ping An Insurance (Group) Co. is the largest shareholder with a 5 percent stake, according to filings. Shares of the Belgian company rose 5.1 percent to 45.90 euros in Brussels, after earlier trading up to 46.53 euros, its highest since October 2008.

In addition to operations across Europe, Ageas sells products in China, Malaysia, India, Thailand, the Philippines, Laos, Cambodia, Singapore and Vietnam. It’s also a minority partner in a joint venture with China Taiping Insurance Holdings Co.

“We believe breaking up the group will be complicated as it will involve many regulators and jurisdictions,” Albert Ploegh, an analyst at ING Bank NV, wrote in a note to clients. Even so, “we believe Ageas has an attractive profile,” Ploegh said, concluding that such a deal would be a positive outcome.

There are other signs that China’s appetite for global expansion is still strong. In May, China Three Gorges Corp., the country’s largest clean energy company, offered 9.1 billion euros to raise its stake in electricity giant EDP-Energias de Portugal SA.

Fosun, meanwhile, received Hong Kong Stock Exchange approval this month to spin off its tourism and hotels unit, which owns Club Med SAS and luxury hotel development Sanya Atlantis.

--With assistance from Vinicy Chan and John Martens.

To contact Bloomberg News staff for this story: Ruth David in London at rdavid9@bloomberg.net;Jing Yang de Morel in Shanghai at jyang543@bloomberg.net;Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.net;Dinesh Nair in London at dnair5@bloomberg.net

To contact the editors responsible for this story: Dinesh Nair at dnair5@bloomberg.net, Chitra Somayaji, Amy Thomson

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