A group linked to Thailand's richest man, Dhanin Chearavanont, has bought global bank HSBC's entire stake in China's Ping An Insurance for $9.38 billion, with China Development Bank backing Asia's second-largest deal this year.
HSBC said on Wednesday it had sold the 15.6 percent stake to an affiliate of Charoen Pokphand Group, a group controlled by Chearavanont which is better known for its agri-business empire than writing insurance policies. "This is phenomenal for HSBC shareholders because the bank
is now sitting on at least $8 billion in profit," said Jim Antos, an analyst at Mizuho Securities in Hong Kong. "I'm not sure what CP Group would do with the stake though. I was joking earlier that every Ping An shareholder will now get a bucket of fried chicken for their insurance policy."
CP Group, whose products include feed for chickens and pigs, has a long history in China.
Chearavanont - worth $7.4 billion according to Forbes magazine - also appears to have strong political connections in Beijing. State-run China Development Bank is helping to finance CP Group's Ping An stake acquisition, according to HSBC. CP Group was the first multinational to invest in China's agri-business in 1979 and, under Beijing's latest five-year plan, it was tasked with helping to modernise China's farm sector. It also operates Lotus super markets in Shanghai,
according to the company's website. CP Group once held an interest in a Thai joint venture with
German insurer Allianz which it sold for 300 million baht ($9.78 million) in May this year.
For its part, HSBC is on a global plan to divest various holdings as it seeks to improve its profitability, exiting the decade-old investment as it looks to sell non-core assets. Thailand's outbound acquisition prowess has grown significantly this year, fuelled by a hot stock market and cashed-up Thai tycoons seeking to invest abroad. Announced Thai M&A deals have soared to a record $18.7 billion so far this year, overtaking the total value of deals in 2010 and 2011
The Thailand SET Index is up 29.7 percent year to date. HSBC sold its stake for HK$59 per Ping An share, for a total of HK$72.74 billion ($9.39 billion). Ping An's Hong Kong shares were up 4 percent after the news at HK$60. The bank said in a statement that the sale would complete in
stages, with about a fifth of the stake to be transferred to the Thai buyer on Dec. 7. The remainder