Portugal government has divested 80% equity stake in state owned insurance group Caixa Seguros to China-based Fosun International, in a transaction valued at approximately €1.6bn ($2.18bn).
Earlier in January 2014, local media reported that Fosun had won the competitive bid to purchase Caixa Seguros from Portugal government in a €1bn deal; however, the surging value of the company fetched €1.6bn for the government.
Owned by state-owned bank Caixa Geral de Depositos (CGD), Caixa Seguros occupies a 26% share of the country’s insurance market.
The divestment is a part of Portugal government commitment to divest state-owned businesses under the terms of its three-year bailout program; it signed with the European Commission, the International Monetary Fund and the European Central Bank in May 2011.
As per the terms of the deal reached in January 2014, Fosun agreed to maintain the unity of the group and also committed to boost the presence of all these companies in Africa and Asia.
Furthermore, the Chinese company committed to buy 80% of the share capital and voting rights of each of these firms including Companhia de Seguros, Seguros de Saúde and Companhia de Seguros, which are wholly-owned subsidiaries of Caixa Seguros e Saúde (CSS).
Commenting on the acquisition, Fosun chairman Guo Guangchang had earlier said: "This marks a solid step for Fosun to evolve into Warren Buffett’s model."
Established in 1835, CSS had total assets of €13bn and net assets of €1.4bn as at the end of 2012.
Image: Caixa Geral de Depósitos’ headquarters in Lisbon. Photo courtesy of Jcornelius.