Fidelity & Guaranty Life (FGL)

[Enterprising Investor]

China’s Anbang to Buy Allianz’s Korean Operations After Dropping Starwood Bid (4/06/16)

The deal with Germany’s Allianz is the Chinese insurance group’s second acquisition in South Korea

By Kane Wu

HONG KONG—China’s Anbang Insurance Group Co. reached a deal to buy the South Korean operations of Germany’s Allianz SE, just days after it walked away from a $14 billion bid for Starwood Hotels & Resorts Worldwide Inc.

The deal is a small one for the ambitious Chinese insurer. Anbang will pay more than $3 million for Allianz Life Insurance Korea and Allianz Global Investors Korea, it said in a Chinese-language statement. Anbang and Allianz also issued a joint statement Wednesday announcing the deal.

Anbang has exploded onto the international scene in recent years by spending billions to acquire insurers and hotels throughout the world. In February 2015, it laid out nearly $2 billion for New York’s Waldorf-Astoria, the highest price ever paid for a single U.S. hotel. It is also a big player at home, with stakes in listed Chinese developers and banks, while also investing in a traditional Chinese medicine maker and a wind-turbine manufacturer.

Anbang made a bid in March for Starwood, which had already struck a deal to sell itself to Marriott International Inc. That sparked a bidding war for the U.S. luxury-hotel owner in which Anbang raised its offer to $14 billion before dropping out last week, citing “various market considerations.”

The deal with Germany’s Allianz is Beijing-based Anbang’s second acquisition in South Korea. A year ago it bought a controlling stake in South Korean life insurer Tong Yang Life Insurance Co. for $1 billion from South Korea-focused private-equity firm Vogo Investment Group and other investors.

Anbang’s purchase from Allianz is subject to local regulatory approvals; the parties expect to complete the deal in the second half of the year.

The South Korea operation being sold was founded in 1954 and acquired by Allianz in 1999. At the end of 2015 it had assets of about $15 billion and 1.1 million customers, according to the Anbang statement.

Yao Dafeng, head of Asia-Pacific for Anbang, said the company will strive to provide better services to Chinese customers entering South Korea.

Anbang’s most recent overseas insurance foray was its $1.57 billion acquisition of U.S. life-insurance provider Fidelity & Guaranty Life last November. That deal has cleared the Committee on Foreign Investment in the U.S., but hasn’t yet closed.

Earlier in 2015, Anbang agreed to buy and recapitalize Dutch insurer Vivat. In December 2014, it snapped up a small Belgian bank.

Write to Kane Wu at [e-mail]

http://www.wsj.com/articles/chinas-anbang-to-buy-allianzs-korean-operations-days-after-dropping-starwood-bid-1459928432