Anbang’s Remains Put Up for Sale With a $5.2 Billion Valuation (2024)

China is getting out of the Anbang bailout business, aiming to sell nearly 99% of the fallen insurance giant’s remains, now valued at 33.6 billion yuan ($5.2 billion), public records show.

The sale, which runs until Aug. 12, marks the government’s latest effort to put Anbang Insurance Group Co. Ltd.’s remaining assets back into private hands and recoup as much of its bailout funds as possible three years after taking over the scandal-ridden insurer. The restructuring is widely seen as a template for how China deals with debt-ridden companies that are considered too big to fail.

Industry bailout fund firm China Insurance Security Fund Co. Ltd. (CISF) and oil titan Sinopec Group, both state-owned, have put up for sale their respective 98.23% and 0.55% stakes in Dajia Insurance Group Co. Ltd., the company created to take over the assets, according to a post (link in Chinese) released Friday by the Beijing Financial Assets Exchange.

The sale of the combined 98.78% stake has attracted six consortiums, Caixin revealed last week. One is led by e-commerce behemoth JD.com Inc. and Hopu Investment Management Co. Ltd., a private equity giant headed by Fang Fenglei, a former Goldman Sachs banker, sources close to Dajia said.

One of the other consortiums consists of state-run investment firm Xiamen International Financial Technology Co. Ltd. and Primavera Capital Group, another private equity firm also led by a former Goldman Sachs banker, Fred Hu, the sources said. The consortium also put in a bid as part of Dajia’s aborted restructuring effort last year.

Other potential buyers include online insurer ZhongAn Online P&C Insurance Co. Ltd., and state-owned carmaker Chery Automobile Co. Ltd., they said.

Anbang is among a group of high-profile Chinese giants whose reckless debt-fueled expansions in recent years brought them billions of dollars in assets both at home and abroad. Many have been forced to sell down their hoards, as Beijing in mid-2017 warned of risks posed by their enormous debt to the country’s financial system.

Starting out as a minor car insurer in 2004, Anbang began making global headlines in 2014 with an ostentatious overseas shopping spree, picking up pricey assets including New York’s iconic Waldorf Astoria hotel.

Behind the scenes, Anbang founder Wu Xiaohui leveraged his ties to a key political figure — his most recent wife is a granddaughter of late state leader Deng Xiaoping — and portrayed himself to outsiders as highly connected. By lobbying financial regulators and other government officials, Wu pushed for regulatory changes and controlled multiple financial institutions, which helped rapidly boost Anbang’s total assets to more than 3 trillion yuan in 2018, Caixin previously reported.

In 2018, Wu was sentenced to 18 years in prison for fundraising fraud and embezzlement.

Regulators took over Anbang that same year, marking the beginning of a state-led restructuring. Shortly after the takeover, CISF injected 60.8 billion yuan into the technically insolvent insurer — as of end-June 2018, Anbang’s total liabilities were 82.8 billion yuan greater than its total assets.

As part of the restructuring plan, CISF in June 2019 established Dajia, which absorbed Anbang’s core insurance and asset-management businesses, with an end goal of introducing strategic investors and turning Dajia into a privately owned company.

By June 2020, Dajia had accepted bids from two consortiums to become new investors — one consisting of Primavera Capital and Xiamen International, and the other including electronics giant TCL Technology Group Corp., Caixin revealed last year.

Read more

In Depth: China’s Anbang Salvage Operation Runs Aground

However, TCL later bowed out of the bidding due to the impact of the Covid-19 pandemic, which caused some of Dajia’s assets to lose value. With just one consortium committed to making an investment, CISF would have been left holding 63% of Dajia.

The restructuring plan flopped in the end, as it would not have turned Dajia into a privately controlled company, and could have resulted in a loss of the bailout fund firm, people with knowledge of the matter said.

That led to the current attempt to find new investors, with the primary goal to recoup as much of CISF’s 60.8 billion yuan investment as possible, the people said.

Tang Ziyi contributed to this report.

Contact reporter Lin Jinbing (jinbinglin@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)

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Anbang’s Remains Put Up for Sale With a $5.2 Billion Valuation (1)

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Anbang’s Remains Put Up for Sale With a $5.2 Billion Valuation (2024)

FAQs

Why billion dollar valuation is not a measure of success? ›

Value should be the main priority of startups and not valuation, say entrepreneurs. Reaching a valuation of $1 billion would make no sense unless the company can grow, create employment and create world-class products. In May, India found its 100th unicorn in a neobank firm called Open.

Who owns Anbang Insurance Group? ›

What does a billion dollar valuation mean? ›

Unicorns are startups whose valuations exceed $1 billion. Companies that reach unicorn status are usually financed by venture capitalists as major innovators, and many end up going public through an IPO.

How many companies are valued at $1 billion? ›

Of some 225,000 companies founded during the past 20 years, only around 2,500 have achieved $1 billion market valuations (including public and private businesses).

What hotels does Anbang own? ›

Anbang's hotel portfolio includes the JW Marriott Essex House in New York, the Four Seasons in Jackson Hole, Wyoming and the Westin St. Francis in San Francisco. Mirae was one of up to 17 bidders interested in acquiring the properties when Anbang was looking for a buyer last year.

Who owns American Family insurance Group? ›

American Family is owned by American Family policyholders, since it is a mutual insurance company and its shares are not available to investors on the public market. Among the 10 largest car insurance companies in the U.S., four are mutual insurance companies.

Who owns insurers? ›

A company that creates insurance products to take on risks in return for the payment of premiums. Companies may be mutual (owned by a group of policyholders) or proprietary (owned by shareholders). (Also known as insurer or provider).

Why profitability is not the only key measure of success? ›

Focusing only on profit without considering a business' positive impact is outdated. The true measure of the success of a business is its impact on the wellbeing of people and the planet. Wellbeing is the ultimate measure of success. Social and environmental impact can no longer be ignored.

Why profit is not a good measure to determine the success of an entrepreneurial venture? ›

Profit is often used as a measure of success in business, but it may not be the best indicator of success for an entrepreneurial venture. There are several reasons for this: Time frame: Profit can be affected by short-term fluctuations in the market, making it difficult to measure success over a longer period of time.

Is money the only measure of success? ›

In conclusion, the measurement of success in your live can be many things. It just depends on time, what goals you have and who is the one doing the judging Money is just the first common, one but it is not the only one.

Is profit the only measure of success for a business Why or why not? ›

Profits may be the most popular metric of measuring the success of a business venture but it is by no means the only (or the best) method for measuring success. Most start-ups are not profitable at the beginning of operation and many are not profitable for years.

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