BEIJING (dpa-AFX) - AIA Group Ltd. (AAIGF.PK, AAGIY.PK) announced Tuesday that it has agreed to invest RMB 12.03 billion or $1.86 billion through its wholly-owned subsidiary, AIA Co. Ltd., for a 24.99 percent equity stake, post investment, in China Post Life Insurance Co., Ltd., 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 1.34x China Post Life book value on a pre-money basis as of December 31, 2020.
Value of new business for China Post Life was RMB 1.866 billion or $269 million for the full year 2020. China is one of the largest life insurance markets globally and capturing the significant growth potential it offers is a core component of AIA's strategy.
AIA's investment in China Post Life increases the Group's exposure to the growth opportunities in the Chinese life insurance market and enables AIA to capture the significant value available from distribution channels and customer segments that are complementary to its existing strategy in China.
The Group's operations of AIA China will remain entirely independent of this investment. AIA and China Post have also entered into a Business Cooperation Framework Agreement to explore additional business opportunities.
Copyright RTT News/dpa-AFX
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