In key news on Hong Kong stocks, Fosun International Limited (HK:0656) has agreed to sell its 8.19% stake in Belgium-based insurance company Ageas to French banking giant BNP Paribas (FR:BNP). According to the statement released by Fosun, the total deal value ranges between €626 million and €670 million, depending upon any adjustment. However, BNP stated the deal value was around €730 million. Clarifications regarding this discrepancy are still awaited.
The shares of Fosun International were trading down by 0.92% today, as of writing.
Fosun Group is a Chinese conglomerate focused on sectors like health, manufacturing, insurance, and asset management.
Further Insights into the Fosun-BNP Deal
The Fosun-BNP deal includes the sale of 15,401,253 Ageas shares to BNP Paribas Cardif, a subsidiary of BNP Paribas.
The acquisition will be conducted through three block trades. Initially, 3.707% of the issued shares will be acquired immediately. Further, 3.157% and 1.33% of shares will be purchased in the second and third stages, respectively, upon securing necessary regulatory approvals.
BNP Paribas and Ageas maintain a longstanding partnership through their joint holding in AG Insurance, which remains unaffected by BNP’s acquisition of a minority stake in Ageas.
The Fosun-BNP Deal’s Rationale
Fosun will utilize the proceeds from the disposal of its stake for general working capital needs. According to Fosun, the disposal is a strategic move aimed at streamlining its portfolio and focusing on its core business activities. Additionally, it reflects the company’s commitment to enhance its financial performance and deliver value to shareholders. After this sale, Fosun will retain ownership of 1,952,524 shares of Ageas.
In the last 12 months, Fosun’s share price has lost 26% of its value.
