News Reinsurance02 Nov 2017

China:Termination of proposed ACR-Shenzhen deal "a mutual decision"

| 02 Nov 2017

All parties involved in Asia Capital Re's (ACR) US$1-billion sale to Shenzhen Qianhai Financial Holdings and Shenzhen Investment Holdings have jointly decided to walk away from the deal, due to additional approvals required by Chinese regulators.

“From ACR’s perspective, we delivered everything that was required of us and I know that our counterparts SIH and QFH tried their best to get the deal done, but unfortunately there were some approvals they were required to get on their part,” said Mr Bobby Heerasing, Acting Group Chief Executive of ACR Capital Holdings told Asia Insurance Review in an exclusive interview. “That would have meant the sales process would have been delayed further into 2018 and that timeline didn’t match with our timeline.”

It was mutually decided by all parties for the sales process to be terminated, with joint legal termination agreements currently being drafted. “The parties are walking away with no issues,” he said.

“Our current shareholders are very supportive of this decision. They are very pleased with how ACR has been performing over the past 24 months and they view us as core to their portfolio going forward. For me, that has been the most encouraging thing, to see the shareholders' reaction. They are very happy to keep ACR and to stay owners of ACR and they see greater value in ACR in the long term,” he added.

Mr Heerasing emphasised that the deal would not have led to any changes to the company’s operations, so breaking off the deal will have no long-term effects on ACR’s performance or plans.

In October last year, ACR Capital Holdings announced that its major shareholders, 3i Group (and affiliates), Khazanah Nasional, Temasek Holdings and Marubeni Corporation, had agreed to terms for the 100% acquisition of ACR by QFH and SIH through the jointly owned holding company, Asia Investment Capital Holdings (AICH). “Subject to receiving regulatory and other approvals, ACR’s shareholders will enter into a definitive agreement with AICH on the acquisition of ACR,” the statement had said. 

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