Ping An Buys a Controlling 53.4Pct Stake in Shenzhen Development Bank

Ping An Insurance (Group0 Co., China’s second largest insurer, will merge its bank unit into Shenzhen Development Bank Co. in a deal valued at 29.1 billion yuan.

Ping An Insurance (Group) Co. of China Ltd. said Wednesday it had agreed to buy an additional 32 percent stake in Shenzhen Development Bank Co., for 29.1 billion yuan ($4.27 billion) in a private placement to control the national lender.

Ping An, China’s second-largest insurer by premiums, said in a statement it will buy 1.639 billion Shenzhen Development bank shares at a price of 17.75 yuan per share, which will make it hold a controlling 52.4 percent stake in the bank.

Ping An will use its 7.825 billion Ping An shares (about 90.75 percent stake) and 2.69 billion yuan of cash to pay for the purchase, according to the statement.

The current deal will boost Shenzhen Development Bank’s shares to 5.124 billion, of which, 52.4 percent, or 2.684 billion shares will be held by Ping An Insurance.

The deal is still subject to approvals of both shareholders and the Securities Regulatory Commission, the statement said.