Primus-led consortium takes Nan Shan for $2.15bn

The Hong Kong-based private equity firm and China Strategic Holdings beat off competitors including Carlyle, Bain and MBK Partners.

A consortium comprising Primus Financial Holdings and China Strategic Holdings has acquired a 97.57 percent stake in Taiwanese insurance company Nan Shan Life Insurance for $2.15 billion from US insurance giant AIG.

The transaction ends months of speculation around the company, for which private equity firms such as The Carlyle Group, Bain Capital and MBK Partners as well as Taiwanese financial majors such as Chinatrust Financial, Fubon Financial and Cathay Financial Holding Company were all bidding at one point, according to media reports.

China Strategic is a Hong Kong-listed investment holding company involved in the making and trading of battery products as well as investments in securities. Following completion, it will hold an 80 percent stake in Primus Nan Shan, the vehicle through which the acquisition will be made, with Primus owning the remaining 20 percent, Robert Morse, chairman and co-chief executive of Primus and vice-chairman of China Strategic, told newswire Bloomberg.

Some 80 percent of the total $2.15 billion deal value will be paid from cash, with the remainder funded by a debt package, Wing-fai Ng, Primus co-chief executive alongside Morse, told the newswire. No further details of the transaction have been dislcosed.

As part of the deal agreement, the consortium has agreed to retain the existing compensation and benefits package for the company’s employees, the existing organisational and commission structure and the Nan Shan brand, for a minimum of two years after the deal closes, according to an AIG statement.

“We aim to develop Nan Shan into a leading Taiwan-based, pan-Asian financial services company,” Morse said in the statement.

Launched in April with an initial permanent capital of $1billion from an Asia-based private family, Primus is the successor organisation of Primus Pacific Partners, an Asian financial services focused private equity firm. This will be the firm’s maiden deal.

Set up in 1963, Nan Shan is Taiwan’s largest life insurer by total book value. The company serves four million policy holders through a network of 24 branches, 450 agency offices, a roughly 4,000-strong staff and more than 34,000 agents. It has total assets of more than $46 billion.

Deutsche Bank advised Primus on the deal, which is subject to regulatory approval. Primus was unavailable for comment at press time.