BEIJING—An arm of Fosun Group will spend at least $1.84 billion to acquire the 80 per cent of U.S. insurer Ironshore Inc. it doesn’t already own, as the Chinese conglomerate furthers a bet on the global insurance industry.
Fosun International Ltd. said in a statement with the Hong Kong stock exchange late Sunday that the proposed deal for the closely held insurer was part of its effort to make insurance a greater share of the group’s core operations. It said all sides reached a deal on Friday to strike a deal and that it hopes to complete the transaction by March next year.
Fosun Group, which is based in Shanghai, has accelerated its deal making in recent years, acquiring everything from French resort operator Club Med to New York City’s One Chase Manhattan Plaza office building.
In an interview with The Wall Street Journal in March, Fosun International Chief Executive Liang Xinjun said insurers are attractive because of their pools of capital, which can be invested to seek high returns. He said the company was planning to spend $2.4 billion to buy five insurers in the U.S., Europe and Asia this year. It bought a 20 per cent stake in Ironshore for about $463.8 million last year.
Fosun, which is run by its chairman and co-founder Guo Guangchang, has interests in everything from mining to real estate and is one of China’s largest conglomerates by assets.
Fosun International said Ironshore had profit last year of $84.5 million, down 13 per cent from the year before. It had total assets of $6.7 billion and net assets of $1.84 billion as of the end of last year, Fosun said. Ironshore is a specialty property and casualty insurer that was formed in 2006.