China Strategic Holdings has entered into an agreement with Hong Kong-based private equity firm Primus Financial Holdings to support its bid for Nan Shan Life Insurance.
This follows China Strategic’s bid of up to HK7.6 billion ($981 million; €687 million) for a stake of at least 60 percent in AIG’s Taiwanese insurance unit.
If the acquisition is successful, China Strategic intends to appoint Robert Morse, chairman and co-CEO of Primus Financial, as a director and vice chairman of Nan Shan, according to a China Strategic statement.
The agreement is “an indication of its commitment to the success of the possible acquisition,” the statement added.
It also highlights the importance of roping in local partners and forming consortiums for this deal. The Taiwanese government was reluctant to let a private equity firm bid for Nan Shan assets on its own as the country’s regulators want to prevent any bidder from making a quick profit on the deal and are seeking a long-term commitment to the Taiwan market, Reuters reported in July.
Then, US buyout major The Carlyle Group was reportedly in talks with Taiwanese financial services giant Fubon Financial to make a joint bid for Nan Shan. Another private equity firm Bain Capital was also seeking to make a joint bid with Taiwanese financial conglomerate Chinatrust Financial, according to various media reports.
Primus Financial was launched in April with an initial permanent capital of $1 billion to manage an alternative investments platform. The firm is the successor organisation of Hong Kong-based private equity firm Primus Pacific Partners, which was focused on Asian financial services.
China Strategic is primarily involved in the manufacture and trading of battery products.