China's Anbang withdraws bid to buy US insurer
But Iowa's Fidelity says the withdrawal isn't final, expects Chinese insurer to refile buy application in "near future"
Hong Kong
ANBANG, a politically connected Chinese insurer, has hit a bump in its effort to buy an insurance company in Iowa for US$1.57 billion, the latest setback to its multi-billion-dollar global shopping spree.
Anbang Insurance Group has struck a remarkable spate of deals including an agreement two years ago to buy the Waldorf Astoria hotel in New York. It has also reached a US$6.5 billion deal to buy hotels from the private-equity firm Blackstone Group, and it has agreed to buy financial firms in Europe and South Korea.
The Chinese insurance company - which until recent years was not well-known even in its home country - is near the forefront of a growing wave of Chinese companies buying companies abroad.
But the campaign has suffered a setback with Fidelity & Guaranty Life, the Des Moines, Iowa-based insurer that Anbang agreed to buy last year. Anbang withdrew its application with the New York State Department of Financial Services to acquire the company, Fidelity said in a filing on Tuesday with the Securities and Exchange Commission.
Fidelity hoped that Anbang could come back, saying the withdrawal was not final and that it expected Anbang to refile in the "near future". Paul Marriott of FTI Consulting in Hong Kong, which represents Anbang, did not have an immediate comment on why Anbang had withdrawn its application. Fidelity did not say why Anbang withdrew its application, which was reported earlier by The Wall Street Journal.
The setback adds to Anbang's recent stumbles. In March, it abruptly ended its US$14 billion bid to buy Starwood Hotels and Resorts. It said little about why it had retreated, mentioning only "various market considerations". Anbang, which owns insurance companies, a bank and a leasing company, says it has almost US$300 billion in assets; it is owned by 39 corporate shareholders, according to China's State Administration for Industry and Commerce.
Two of the shareholders are state-owned companies, while the other 37, which own more than 95 per cent of Anbang, are an opaque web of interconnected companies. Many share phone numbers, email addresses and management, The New York Times reported in March.
Anbang's chairman, Wu Xiaohui, married a granddaughter of Deng Xiaoping, a former Chinese leader. One Anbang director is the son of Chen Yi, a long-serving foreign minister and top army general who died in 1972. Another former director is the son of Zhu Rongji, China's prime minister from 1998 to 2003.
Anbang must obtain regulatory approval for its takeover from states where Fidelity does business. It also has a pending application in Iowa, Fidelity said in its filing on Tuesday. Fidelity shares fell by more than 3.3 per cent on Tuesday in New York, their biggest drop since August.
Anbang's purchase of Fidelity, announced in November, was cleared by the Committee on Foreign Investment in the United States, Fidelity said in March. NYT
