Dah Sing closes higher in Hong Kong on agreement to sell insurance unit for HK$10.6 billion

Shares of Dah Sing Financial and Dah Sing Banking both closed sharply higher in Hong Kong on Friday after its corporate group agreed to sell its insurance business for HK$10.6 billion in cash to Chinese conglomerate Fujian Thai Hot Investment.

Dah Sing Financial Holdings, which operates Dah Sing’s insurance business in Hong Kong and Macau, climbed 3.3 per cent, or HK$1.65, to end at HK$51.8. Dah Sing Banking Group gained 1.9 per cent, or HK$0.25, to close at HK$13.6

Dah Sing said in an exchange filing late on Thursday that Fujian Thai Hot will purchase Dah Sing’s life insurance operations in Hong Kong and Macau and enter into distribution agreements with both Dah Sing Life Assurance Company (DLSA) and Macau Insurance Company (MIC).

The deal is still subject to regulatory approval and shareholders’ agreement, the company said.

“The opportunity to form a long-term bancassurance partnership with DSLA and MLIC, under the ownership of a reputable business conglomerate in the People’s Republic of China, will also allow the group to continue to develop its bancassurance business and customer base,” Dah Sing said in the statement.

The company will use the proceeds to reinvest in its business and pay a special dividend and to also use the funds for general working capital purposes.