AMP has announced it has agreed to acquire a 19.99 per cent stake in China's largest pension company China Life Pension Company.
The $240 million acquisition makes AMP China Life's second largest shareholder of the pension company, which provides enterprise annuities products to state-owned and private enterprises, and includes three licences allowing end-to-end services throughout China.
AMP will enter into a business cooperation undertaking to run technical support to China Life Pension Company. It will nominate two directors to the 11-member board of China Life Pension Company.
"This acquisition provides AMP with a strategic foothold in the rapidly growing enterprise annuity segment of China's pension market and also extends our relationship with China Life, a leading global financial services brand," AMP CEO Craig Meller said.
The agreement to acquire the stake by AMP will be funded via current surplus capital and liquidity facilities.
AMP predicts the agreement will take away $180 million from the surplus capital over minimum regulatory requirements of AMP Life and consequently, AMP Group.
"This marks a new chapter of transformation for China Life in the diversification of its equity base, internationalising its business and making its operations more market-orientated," China Life Insurance Group Chairman Yang Mingsheng said.
AMP Capital announced in September last year it plans to set up a funds management company with China Life Asset Management Company, which is a subsidiary of China Life Insurance.
It planned to offer retail and institutional investors in China access to investments in domestic listed equities and fixed income, and held a 15 per cent share.
