Discovery Enters Chinese Market

Discovery Holdings buys 25% stake in Ping An Health Insurance They paid R900 million for a quarter stake in China's second largest life insurance.

In a bid to expand its global footprint, Discovery Holdings, South Africa's largest health care insurer has purchased a 25% stake in Ping An Health Insurance.

Discovery paid slightly less than R900 million for the quarter stake in China's second largest life insurance group.

This is the first time that Discovery Holdings is venturing into the Chinese market.

In a statement announced by the two groups, the non binding preliminary agreement will have Discovery purchase 24.99% of the Chinese company's health insurance unit.

The parent company will continue to hold 75.01% of the stakes.

Ping An provides a wide range of insurance services to the Chinese population, including reinsurance, health insurance and consultancy services.

According to the group, it has assets that are worth over $73.2 million.

Discovery will purchase new shares on Pin An Health Insurance, although neither of the groups would discuss the current share capital of the unit.

"It's just a letter of intent," said a spokesperson for Ping An. "We are still drafting the details of the share-placement plan."

The Chief Executive Officer of Discovery Holdings, Adrian Gore said that the deal also gives the South African group significant access to the parent company, which is owned partially by the global HSBC Holdings.

"The amount of capital we are committing to this is not material in terms of scale," said Gore, who also added that the deal would be funded through existing capital.

"We're hoping by the end of the first quarter the deal is done... but I think to be realistic to expect it to be closed by the second quarter is realistic," he said.