China Life in Purchase of Citi’s and IBM Credit’s Stake in CGB

March 7, 2016

Cleary Gottlieb represents China Life Insurance Company Limited in connection with its purchase of all the shares of China Guangfa Bank Co. currently held by Citigroup, and IBM Credit, a wholly-owned affiliated entity of International Business Machines, for a total consideration of RMB 23.31 billion (approximately $3.58 billion).

The transaction agreements were signed on February 29 in a ceremony attended by senior officers of China Life and Citi as well as personnel from China’s insurance and banking regulatory agencies.  The transaction is expected to close in the second half of 2016 subject to obtaining relevant regulatory approvals.

China Life is the largest life insurance company in China.  It is simultaneously listed on the New York Stock Exchange, the Hong Kong Stock Exchange and the Shanghai Stock Exchange.  As of June 30, 2015, China Life had gross income of approximately RMB 331.32 billion and total assets of approximately RMB 2,379.56 billion.

Established in 1988, CGB is one of the first joint-stock commercial banks in China.  As of December 31, 2015, CGB operated 759 branches across the mainland China and the Macao Special Administrative Region, and its audited total assets amounted to approximately RMB 1,836.5 billion.  China Life currently holds a 20% stake in CGB and will own approximately 43.7% of CGB’s total outstanding shares upon the closing of the transaction.