HSBC TO INCREASE STAKE IN PING AN BY ACQUISITION OF SHARES FROM GOLDMAN SACHS &
Hong Kong, May 9, 2005 – Ping An was informed today by its shareholders, HSBC Insurance Holdings Limited, The Goldman Sachs Group, Inc. and MSCP/PA Holding Limited, that HSBC Insurance Holdings Limited, a wholly-owned subsidiary of HSBC Group, has entered into agreements to agree to acquire, subject to certain conditions precedent, shares in Ping An currently held by the private equity arm of The Goldman Sachs Group, Inc. and MSCP/PA Holding Limited, an entity controlled by funds managed by the private equity arm of Morgan Stanley. Such acquisition will increase HSBC’s stake in Ping An to 19.9%.
Goldman Sachs and Morgan Stanley invested in Ping An in June 1994. Their combined interest in the Company is currently equal to approximately 10.1% of the Company’s issued share capital. Under the terms of the agreements, HSBC has agreed to acquire a combined stake of 9.91% for HK$13.2 per share, a 9％ premium to the price at which Ping An shares closed on the Hong Kong Stock Exchange on Friday, May 6, 2005, representing a total consideration of HK$8.1 billion. This transaction is subject to conditions including approval from the China Insurance Regulatory Commission and other approvals as required by PRC regulators and is expected to be completed on or after 24 June 2005.
Mr. Peter Ma, Chairman and CEO of Ping An, said: “Ping An is the first financial institution in mainland China to bring in foreign shareholders. Since their equity investment in 1994, Goldman Sachs and Morgan Stanley have played a very important role in Ping An’s establishment of international standard and have also enjoyed good investment returns. We are very grateful to their assistance and support to Ping An and would respect their decision in this transaction. We will continue our effort in building Ping An as one of the leading international financial conglomerate and bringing higher return to our investors.”
Sir John Bond, Chairman of HSBC Holdings plc, said: “This year marks the 140th year of HSBC's continuous presence in mainland China and our proposed additional investment in Ping An Insurance demonstrates the confidence HSBC has in the future of the country. We are optimistic about the long term prospects of the insurance industry in mainland China and believe Ping An is well positioned to benefit from the sector’s development. We are looking forward to developing our partnership with Ping An and working more closely with them in the future.”
Henry Cornell, Managing Director and Co-head of Goldman Sachs’ Principal Investment Area for the Americas & Asia, commented: “We have enjoyed a mutually rewarding relationship with Ping An over the past 11 years. We are pleased to see that our share in this company will transfer to Ping An’s existing strategic investor with the full support of management.”
David Liu, Managing Director and Co-head of Morgan Stanley Private Equity Asia, commented: “Morgan Stanley is proud to have been part of Ping An’s growth and development for the past 11 years. This has been a very successful investment for us and we appreciate the hard work and the value created by all of Ping An’s management and employees.”
HSBC subscribed a 10 percent interest in Ping An in November 2002. In June 2004, Ping An became a publicly listed company on the Hong Kong Stock Exchange.
About HSBC Group
The HSBC Group is one of the largest banking and financial services organisations in the world. The Group has over 9,800 offices in 77 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa, serves over 110 million customers and has assets of US$1,277 billion at 31 December 2004.
About Goldman Sachs
Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.
About Morgan Stanley
Morgan Stanley is a global financial services firm and a market leader in securities, investment management and credit services. With more than 600 offices in 28 countries, Morgan Stanley connects people, ideas, and capital to help clients achieve their financial aspirations.
About Ping An
Ping An Insurance (Group) Company of China, Ltd. ("Ping An") was founded in 1988 and has its headquarter in Shenzhen. With insurance as its core business, Ping An has grown into a close-knit, efficient and diversified financial holding group that integrates securities, trusts and banking. The group company is the holding company of Ping An Life Insurance Company of China, Ltd., Ping An Property & Casualty Insurance Company of China, Ltd. According to the gross written premiums, Ping An Life was ranked the second largest life insurance in the PRC, Ping An P&C was ranked the third largest property and casualty insurance company in the PRC.
