Ping An Insurance Group has agreed to buy a majority stake in the newly-established Founder Group, the Chinese Partner of Credit Suisse.
The insurer said it will acquire 51.1% to 70.0% equity interest in the Shanghai-listed broker. The deal is estimated to value between $5.72bn (RMB37.05bn) to $7.9bn (RMB50.75bn).
Peking University Founder Group holds about 28% stake in the new Founder Group whose assets include Founder Securities, Founder Technology Group and China Hi-Tech Group.
Peking University Founder Group started its court-led restructuring proceedings early last year. The company has defaulted $3bn of dollar bonds and RMB 34.5bn of onshore bonds, according to a report by Bloomberg.
This January, Ping An Insurance was brought in as one of the investors whilst the restructuring plans of the Founder Group.
A team from Ping An has been carrying out due diligence on Founder Securities, people familiar with the matter told the publication.
The insurer is considering merging Founder Securities with its securities arm, Ping An Securities, the sources added.
China’s securities sector
In April last year, China officially scrapped limits on foreign ownership of securities companies opening up its securities segment for foreign investment companies.
The move has attracted interest from a number of foreign players who are looking to bulk up their holdings in their Chinese ventures towards full control.
Last week, BNP Paribas has submitted an application with Chinese securities regulator to set up a securities company in the country.
In December last year, American investment bank Goldman Sachs has signed an agreement to take 100% control of its securities joint venture (JV) in China.
Last October, British bank Standard Chartered submitted an application for a brokerage licence with the CSRC.
Last September, the CSRC granted approval for DBS Group to set up a joint venture securities company.