SYDNEY - Insurance Australia Group (IAG), Australia's largest home and car insurer, has signed a preliminary deal to purchase a 25 per cent stake in China Pacific Property Insurance, with an option to raise its stake to 40 per cent.
IAG said the price would be determined following the completionof an audit under Hong Kong accounting principles.
The group said last month that it was in talks with the Shanghai-based insurer, with media reports at the time suggesting a 25 per cent stake would cost in the region of A$400 million ($437 million).
China Pacific Property is the second-largest general insurer in China, with a market share of approximately 12 per cent, IAG said yesterday.
The move continues IAG's drive into Asian markets after it took a 30 per cent stake in Malaysia's number-two car insurer, AmAssurance, in December.
IAG, whose brands include NRMA Insurance, SGIO, SGIC, CGU and Swann Insurance, has been planning to expand into Asia for several years because its local market share means an Australian acquisition would raise antitrust concerns.
It already owns the Beijing-based China Automobile Association (CAA), a roadside vehicle repair and towing service, and 20 per cent of Thailand's fifth-biggest car insurer, Safety Insurance.
