|
CHINESE conglomerate Fosun International Ltd. is making its first foray into the U.S. insurance market and buying property and casualty insurer Meadowbrook Insurance Group, a deal that it said would help it secure funds for further acquisitions.
The deal, the latest in a buying spree by Fosun that has seen it spend more than US$4 billion in two years, would also be the first full purchase of a U.S. insurer by a Chinese company and comes as China encourages its firms to extend their reach beyond emerging markets to Western financial firms.
Fosun, owned by billionaire businessman Guo Guangchang, said in an exchange filing yesterday that it would buy Meadowbrook for about US$433 million. The cash deal of US$8.65 per share represents a 24 percent premium over Meadowbrook’s closing price Dec. 29, the companies added.
“The group regards the development of insurance business as a major approach to access long-term high-quality capital,” Fosun said in the filing. A Fosun spokeswoman declined to comment further.
Fosun’s Guo is seeking to broaden the conglomerate’s access to capital in order to fund a series of acquisitions he hopes will transform the group’s business model.
In the past two years, those deals have largely been funded with bank credit and leverage, but now Guo hopes to gain a more sustainable source of funds by buying into financial firms.
In May, Fosun bought Portuguese insurer Fidelidade for US$1.29 billion, bolstering its assets and easing the pressure on its balance sheet.
Guo, who Forbes estimates has a net worth of about US$4.3 billion, is also involved in a takeover bid for French holiday operator Club Mediterranee SA with Italian tycoon Andrea Bonom.
The group has also expressed interest in bidding for Portugal’s Novo Banco SA, the new bank created in the wake of the failure of Banco Espirito Santo SA, Chinese media said.
Fosun, which has a market capitalization of about US$9.10 billion, is into insurance, industrial operations, investment and asset management. (SD-Agencies)
|
