HSBC has agreed to sell its stake in China's Ping An Insurance to Thai billionaire investor Dhanin Chearavanont for around $9.4bn.
The sale will see HSBC clear its entire 15.7 percent stake in China's second-largest insurance group through a deal with Dhanin's Dhanin's Charoen Pokphand Group Co, which agreed to pay HK$59 per share, the company said in a statement published Wednesday. The deal is expected to close on 7 January after approval from the China Insurance Regulatory Commission .
HSBC has been attempting to slim down some of its non-core operations throughout most of the past two years, but has accelerated that plan since being slammed by charges of money laundering in the United States in the summer. Stuart Gulliver has arranged nearly 40 separate divestments since taking over as CEO in last January as part of a $3.5bn cost-cutting drive.
Last spring it sold its general insurance business in Hong Kong, Singapore and Mexico to France's AXA for around $500m and its Argentinian unit to Australia's QBE Insurance for around $420m. Collectively, HSBC has announced around 41 asset sales since the beginning of 2011.
HSBC built the Ping An stake between 2002 and 2005, spending around $1.7bn to acquire its 15.6 percent holding. Ping An shares fell to a two-month low in Hong Kong Monday following news of the sale and confirmation of the talks by HSBC.
HSBC shares rose 0.8 percent to 641 pence each in the opening minutes of trading in London Wednesday. The shares have risen 27 percent so far this year.