Ping An show interest in Prudential

It is believed that Ping An Insurance of China is interested in buying a non-controlling stake in Prudential, the UK insurer. Prudential declined to comment.

Following the news, shares in Prudential increased 6% leading the FTSE recovery, followed by mining stocks and other insurers. In addition, Aviva, which owns Norwich Union, increased 4% after the news.

Shares in Prudential have been under pressure lately following increased stock market volatility.

China’s Ping An Insurance is in the midst of raising $11 billion (£5.6 billion) through the sale of bonds and additional shares, which reports have suggested could be used to fund investments in Europe and the United States. The insurer is worth over £40 billion.

Insurance companies in China are being urged by their Government to commence talks with big Western companies. China’s biggest insurer, China Life, is rumoured to be looking at European or US insurers.

Should a deal between Prudential and a Chinese company proceed, it would achieve far greater scale in China, where foreign companies can own only a quarter of a domestic company.

Sir David Clementi, Prudential’s chairman, joined the Prime Minister last week on a visit to China that was intended to foster business links between the two countries.

Prudential operates across 13 markets in Asia, including in China and India.

Discuss this in the Finance Markets forums

Story link: Ping An show interest in Prudential