China Re appoints UBS to find foreign buyer for pre-IPO stake

China Reinsurance, the largest reinsurer on the mainland, hired Swiss investment bank UBS to find a foreign buyer to take a strategic pre-float stake in the group of about 10 per cent before it went public in the second half of next year, a source said.

'They're arranging the framework for formal discussions now,' the source said, adding that China Re wanted to seal a deal by the end of the first half of next year.

The comments follow remarks from Li Kemu, vice-chairman of the China Insurance Regulatory Commission, who said on Tuesday that China Re was preparing a share float 'and will let in foreign insurance companies as strategic investors', according to a Reuters report.

Swiss Re, the largest reinsurer in the world, Munich Re, the second largest reinsurer, and US-listed Renaissance Reinsurance had all been in talks with China Re to take a stake last year, market sources said.

However, China Re was reported to favour European firms, such as Swiss Re and Munich Re, because they dominated the industry, people familiar with the company said.

After attracting overseas money, China Re hoped to launch initial public offerings as early as the second half of next year in both Hong Kong and Shanghai, the source said.