China: Ping An to buy Autohome stake from Telstra for $1.6b

Ping An Insurance Group Co., China’s second-largest insurer, agreed to buy a 48 percent stake in Chinese car website Autohome Inc. from Telstra Corp. for $1.6 billion, extending a shopping spree by the nation’s insurance companies.

Ping An will buy the shares at $29.55 each, according to a statement. That’s 2 percent below the stock’s last close. For Telstra, which bought into Autohome in 2013, the sale will lead to a gain of about A$1.8 billion ($1.4 billion).

Chinese insurance companies, flush with cash from savers, have embarked on a shopping binge. Including Autohome, they’ve announced transactions valued at $14.9 billion so far this year, five times the pace of last year’s deals, according to data compiled by Bloomberg. And that’s excluding the $14 billion offer by a group led by Anbang Insurance Group Co. for Starwood Hotels & Resorts Worldwide Inc., which was later scrapped.

Autohome will “benefit from a strategic investor in Ping An, which has expertise in car insurance and financing,” Telstra Chief Executive Officer Andrew Penn said in the statement Friday.

Ping An’s Profit

Ping An’s profit from vehicle insurance, which accounts for more than 70 percent of the company’s property and casualty insurance operations, dropped 2 percent last year even as premium income from the segment jumped 19 percent, as regulators expanded a reform to liberalize pricing for the business. The insurer held 10.2 billion yuan in cash and equivalents as of Dec. 31, according to its annual report.

While Ping An has recently started looking into overseas assets in the U.S. and Europe amid expectations of a weakening Chinese yuan, “we’re still at a very cautious pace,” Chief Financial Officer Jason Yao said in an interview with Bloomberg Television’s Yvonne Man on March 16.

Telstra, which expects to book gains from the sale during the half-year ending June, will keep a 6.5 percent stake in Autohome, according to the statement.

Telstra rose 1.6 percent to close at A$5.24, while Ping An fell 1.1 percent to HK$37.85 before announcing the deal

Also Read:

China’s shopping spree helps offset weak Q1 for global M&As

Great leap upward: Behind China’s $100b shopping spree

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.