French insurance group Axa said on Wednesday that it would buy half of Tian Ping, a Chinese property and casualty (P&C) insurer to become the largest foreign insurance group in that segment of the Chinese market.
Axa said that it would pay 485 million euros ($630 million) for the holding, which is to be acquired via a direct stake of 33 percent bought from current shareholders and through participation in a capital increase "to support future growth," pending approval by regulatory authorities.
Tian Ping is to be controlled jointly by the current shareholders, who were not identified, and by Axa, which also planned to contribute its existing Chinese P&C insurance activities.
Tian Ping is listed on the Shanghai stock exchange.
A source close to the matter said that the deal could be finalised before the end of 2013.
For Axa, the acquisition provides access to property insurance and direct distribution licenses in the majority of Chinese provinces.
Tian Ping currently focuses on auto insurance but the new company expects to expand into services for companies, and provide health insurance for individuals.
"This acquisition provides AXA with unique direct distribution capabilities in the fast-growing P&C insurance market in China, thanks to Tian Ping's extensive knowledge of the domestic market," Axa chairman and chief executive Henri de Castries was quoted by the statement as saying.
"It further strengthens the profile of AXA's global P&C franchise and is another stepping stone towards our ambition to accelerate further in high growth markets," he added.