Chinese conglomerate buys 80 pct of Portuguese state insurance group

10 January 2014

Chinese conglomerate Fosun International has paid 1 billion euros for 80 percent of Portugal’s Caixa Seguros, the European country’s state-owned insurance group, the Portuguese government said in a statement issued Thursday in Lisbon.

At the end of a Council of Ministers meeting, the secretary of state for Finance, Manuel Rodrigues said that the government had selected the proposal put forward by Fosun International due to the “cash payment, the strategic project, minimisation of legal restrictions and the contribution to preserving the strategic unity of the insurance group.”

The offer from Fosun International beat one put forward by US private equity company Apollo, which had also been selected by the government for the final phase of the tender to sell a majority stake in Caixa Seguros.

According to the decision made by the Portuguese government, Fosun International will be able to increase its stake in the group to 85 percent if workers do not buy the shares earmarked for them. The remaining 15 percent will remain in the hands of Portuguese state financial group Caixa Geral de Depósitos (CGD).

According to the Finance Ministry the proposal from Fosun gave better guarantees of sustainability as it committed to keeping Caixa Seguros for a longer period (at least 10 years) than the four years required by the tender, which the US group did not propose to do.

This is the third privatisation carried out by the current Portuguese government to be handed over to Chinese investors (Caixa Seguros, EDP – Energias de Portugal and Redes Energéticas Nacionais) and that altogether have netted the State around 4 billion euros. (macauhub)