Primus Takes Over Nan Shan Life Insurance

Taipei, Oct. 14, 2009 (CENS)--Primus Financial Holdings and China Strategic Holdings, both registered in Hong Kong, announced yesterday (Oct. 13) reaching an agreement with AIG Group of the U.S. for acquiring 97.57% of the stake in Nan Shan Life Insurance, the third largest life insurance firm in Taiwan, at US$2.15 billion (around NT$69.3 billion), the largest cross-border financial takeover deal on the island ever.

Primus will contribute 20% and China Strategic the remaining 80% for the cost of the takeover, in cash entirely, with 65% of the payment from own capital and 35%, or US$750 million, from syndicated loan provided by domestic banks.

The board of directors of AIG Group approved the deal at 6:00 a.m. yesterday Taiwan time (or 6:00 p.m., Oct. 12, New York time) and representatives of AIG and Primus signed the deal in Taipei at 11:00 a.m.

Robert Morse, chairman and co-chief executive officer of Primus Financial and vice chairman of China Strategic, assured no any change in the interest of the clients' interest and pledged to retain the Nan Shan brand and the existing management team and sales force, under the same pays, fringe benefits, business organization, and commission system. He also pledged to protect staffers' working right for at least two years and didn't exclude the possibility of listing the company's stock on the local stock market.

He assured no involvement of Chinese capital in the deal. Primus was just established in April this year, reportedly mainly for taking part in the bidding for Nan Shan, with China Strategic as its major shareholder. The latter is reportedly controlled by a number of wealthy families in Hong Kong, including Lee Shau Kee, chairman of Henderson Land Development Co., Ltd.

Ng. Wing-fai, managing director and co-chief executive offer of Primus, described Primus's offer for the deal as a "sky-high price," adding that the company will use Nan Shan as a platform to tap the insurance markets of other Chinese communities, such as Hong Kong and Singapore.

Established in 1963, Nan Shan now boasts a sales force of 34,000 and 4 million clients, with effective insurance policies numbering near 8 million. It ranks No. 3 in terms of the domestic life-insurance market share, trailing Cathay Life Insurance and Fubon Life Insurance (which takes over ING Antai Life Insurance) and has book value of NT$130 billion and assets of NT$1.6 trillion