Mergers & Acquisitions

Fosun Group

Fosun to use Portuguese-speaking markets as test beds for integrated businesses

PUBLISHED : Monday, 10 July, 2017, 6:45pm
UPDATED : Monday, 10 July, 2017, 11:00pm

Fosun Group, one of China’s biggest buyers of global assets and companies, said it’s identified the world’s Portuguese-speaking markets as test beds for a business model combining health care with financial services, as it builds a strategy around Portugal’s largest insurer, along with a hospital operator and a bank.

Fosun’s acquisitions in Portugal began in 2014, with a 1.04 billion euro (US$1.14 billion) takeover of the country’s largest insurer Fidelidade Cia de Seguros SA, followed by a purchase in the same year of hospital operator Espirito Santo Saude SGPS SA, and capped off last November with a 174.6 million euro acquisition of Banco Comercial Portugues SA (BCP).

“The first acquisition was coincidental, as we put our investment search engine to work, and it identified Fidelidade,” Fosun’s founder and chairman Guo Guangchang said in an interview with the South China Morning Post in his Hong Kong office. “From there, we decided to follow through with a concerted effort, a strategy, to focus on a vertical.”

Owning an insurer, with a bank and a hospital allows Fosun to create what Guo likes to call an ecosystem of interrelated businesses that create synergies for each other. Fidelidade policy holders can receive medical care at Santo Saude, while BCP can arrange financing needs. The business units can refer customers to each other, and grow with each other.

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From Portugal, Fosun plans to replicate the business model throughout other Portuguese-speaking nations, including Brazil, Mozambique and Angola in Africa, East Timor in Asia and Macau on the doorstep of mainland China. Guo said he would be spending the next two weeks in Brazil.

The conglomerate, which already owns businesses in pharmaceuticals, healthcare, finance, property and internet apps, said it aims to open a BCP branch in Macau, but will stay away from gambling and casinos.

“What Macau needs most right now is investment other than gambling and casino,” he said. “What the city lacks is non-gambling business.”

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Cirque du Soleil, Fosun’s Canadian theatrical producer that has also performed in Macau, is an obvious choice to stage in the former Portuguese enclave, as is the Club Med chain of holiday resorts and villas, which operates a Le Luxe hotel on Dong’ao island in Zhuhai, across the border from Macau.

Chinese companies have invested US$50 billion into the world’s Portuguese-speaking countries as of last year, with the value of contracts exceeding US$90 billion.

Guo founded the company in 1992 along with four other graduates of Fudan University, initially as a health care company and later expanding into insurance and real estate.

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In the next 10 years, Guo said the company will focus its strategy on a mission to pursue health, happiness and wealth to the rapidly emerging middle class in China.

While expanding its business, Guo said the company carefully manages its financial health and look for various financing channels to fund its expansion .

Raising capital through an initial public offering is an option, he said.

Part of the plan is to consider the possibility of listing its unit Yong An, which is a property and casualty insurer headquartered in Xi’an with nationwide operations. Yong An would speed up its pace of seeking a stock market listing, Guo said during a July 6 event in Xi’an.