AIA has agreed to invest CNY12bn (£1.34bn, $1.86bn, €1.56bn) for a 24.99% equity stake in China Post Life Insurance Company.
This is subject to securing all necessary regulatory approvals.
The investment will be financed on an all-cash basis from internal resources. The total value of the proposed investment represents a valuation of 1.34 times the China Post Life book value on a pre-money basis, as of 31 December 2020.
AIA China will remain entirely independent of this investment.
China Post Life is a subsidiary of China Post Group Company, and through its distribution partnership with Postal Savings Bank of China (PSBC), it has access to a retail financial distribution network of around 40,000 financial outlets nationwide and more than 600 million retail customers.
China Post Life currently distributes in 21 provinces, covering 80% of the PSBC network.
Details
A team comprising representatives from AIA Group and China Post Life will form the technical assistance advisory committee reporting directly to the board of directors of China Post Life.
Areas of technical support and cooperation will include product development, technology, investment and risk management expertise, as well as support in expanding China Post Life’s distribution operation. AIA will have the right to nominate one non-executive director to China Post Life’s board of directors.
AIA and China Post have also entered into a business cooperation framework agreement to explore additional business opportunities.
Offering
Lee Yuan Siong, AIA’s group chief executive and president, said: “This unique investment in China Post Life enables AIA to capture additional areas of growth and benefit from the substantial potential for value creation.
“The strong and aligned relationship between China Post Life and China Post is the right model at the right time for successful partnership distribution in China.
“AIA’s investment in China Post Life is highly complementary to our strategy in China and enables the group to capture significant upside from additional distribution channels and customer segments, helping millions more Chinese families live healthier, longer, better lives.”
Dang Xiurong, party secretary and chairwoman of China Post Life, said: “China Post Life has a rare opportunity as one of the fastest growing life insurers in China. Our unique operating model and the largest retail financial distribution network are distinctive competitive advantages and the cornerstones of our strategic ambitions.
“We are confident that with the support of AIA’s unrivalled experience, we will advance our strategic priorities and bring financial protection to the under-penetrated mass and emerging mass-affluent market at pace, while capturing the significant potential for further growth and sustainable value creation.”
