BNP Paribas becomes top investor in Belgian insurer Ageas

Paris/Hong Kong — BNP Paribas, the eurozone’s biggest bank, has agreed to buy a 9% stake in the Belgian insurer Ageas from China’s Fosun Group for about €730m, a deal that will make BNP Paribas Ageas’ biggest shareholder.

The deal ends months of speculation about the future of Fosun’s direct and indirect holdings in Ageas as the Chinese conglomerate speeds up asset sales to reduce its debt burden after an acquisition spree.

The acquisition, to be made via the insurance division BNP Paribas Cardif, also fits BNP Paribas’ strategy of developing its insurance business. The French lender’s $16.3bn sale of its US retail activities has left it with funds for acquisitions.

Ageas and BNP Paribas are long-time partners via a joint shareholding in AG Insurance, Belgium’s leading insurer, in which Ageas owns 75% and BNP the remainder.

Ageas said it was “pleased to see that BNP Paribas recognises, through this investment, the value of its partnership for the long term and the potential of the company going forward”.

Failed bid

Last month, Ageas dropped plans to buy Direct Line after the British home and motor insurer turned down a revised £3.17bn takeover bid.

BNP Paribas’ statement on the size of the stake and value of the deal differed slightly from a separate statement by Fosun. The bank said it would acquire a first 4.8% tranche in coming days, with the rest of the 9% stake to be bought after receiving regulatory approvals.

Fosun International said in a filing to the Hong Kong Stock Exchange that it agreed on April 12 to sell shares equivalent to a 8.19% stake in Ageas for up to €670.

The sale will be done via three block trades with the last two trades completed within 10 business days after regulatory clearance is obtained or waived, according to the filing.

The Chinese company said it intended to use proceeds of the sale for general working capital.

“The disposal is part of the company’s effort of streamlining its portfolio and implementing core business-focused strategy. It also demonstrates the group’s continuous determination on improving its financial performance and creating maximum value for its shareholders,” Fosun said.

Fosun said it would still hold 1,952,524 shares in Ageas after the sale, equivalent to a stake of about 1%.

Reuters