Taikang Life in final stages of negotiation with Goldman Sachs

Tuesday, June 29, 2010

Chen Dongshen, CEO of Chinese insurance firm Taikang Life, has issued a statement to say that his organisation is in the final stages of negotiation with Goldman Sachs, with a view to selling Axa’s stake in the business.

Axa, who are based in France, has been forced to make the sale as a result of a conflict of interest with another Chinese company. The insurance giants inherited Taikang Life in 2006, as a result of their acquisition of Winterthur Life. However, as Axa has a 51% stake in a separate joint business venture in China, they are required to sell their Taikang Life stake.

Chen Dongshen commented upon the anticipated deal from the Fortune Global Forum conference in South Africa, stating that the negotiations between Goldman Sachs and his organisation are reaching completion. The deal is thought to be worth over $1bn to Taikang Life, which has surprised insurance industry experts, as Goldman Sachs are not known for their strategic investments within the life insurance industry. Dongshen suggested that Taikang Life may list within the next three or four years. Chinese administration tends to favour long-term investment in their financial services industry, which indicates that Goldman Sachs may have pledged to provide ongoing long-term investment for Taikang Life.

Taikang Life is China’s fifth largest insurance group, set up in 1996 as a national, incorporated company specialising in life insurance. The company is based in Beijing. In 2001 the firm achieved AAA credit rating from China Chengxin International Credit. It now has 32 branches and 259 central sub-branches across China. At the end of 2008, the gross asset of Taikang Life hit RMB 200 billion and they became a large-scale investor in the domestic capital market. The company ranked fourth in the PRC life insurance market.