According to an article by Bloomberg, Beijing-headquartered Anbang has asked investment banks to pitch for a role in managing a potential sale of Fidea, which offers a range of insurance products.
Further, the article says Anbang could consider starting a formal auction process in the third quarter 2018.
Anbang bought Fidea in May 2015 from J.C. Flowers and Co for €369m ($434m, £326m), according to the insurer’s 2015 annual report.
However, the source who spoke to Bloomberg said deliberations are at an early stage, and there is no certainty it will lead to a transaction.
In addition to Fidea; Anbang owns Dutch insurance company Vivat, South Korean insurer Tongyang Life and Iowa-based Fidelity and Guaranty Life.
While the sale of Fidea is not guaranteed – it hints at a potential sale of more of Anbang’s assets, which could see M&A activity in the insurance sector rocket.
Government takes control
If the sale does go ahead, it would be Anbang’s first European divestment since it was seized by the Chinese Insurance Regulatory Commission (CIRC) in February 2018.
The regulator said it would retain control of Anbang for one year, but this could be extended by another year if needed.
Corruption concerns
An extravagant overseas shopping spree, that saw Anbang buy New York’s Waldorf Astoria hotel, drew regulatory scrutiny amid worries that the insurer had grown too risky.
The firm’s downfall started in April 2017, when it was forced to make statements illustrating its cash reserves and rebut rumours it was taking risky loans.
At the same time, the CIRC warned it was concerned about corruption in the sector.
Cash injection
With control of the insurer in the hands of the regulators and its chairman facing a lengthy jail term, a cash injection worth RMB60.8bn (£6.8bn, $9.1bn, €7.7bn) was given by the China Insurance Security Fund (CISF) in March 2018.
A month later, chairman Wu Xiaohui was sentenced to 18 years in prison for fraud and embezzlement. He has since appealed his conviction.
At the time, it was stated that the CISF would temporarily hold shares in the group during its period under interim management.
The plan is to gradually transfer the fund’s shares in the insurer to maintain Anbang’s status as a private company.
