At a glance
Questions from a US regulator have prompted Anbang Insurance to drop an application for approval of its $1.57bn buyout of Fidelity & Guaranty Life, the latest regulatory hurdle faced by the Chinese company regarding a US acquisition
Questions from a US regulator have prompted Anbang Insurance to drop an application for approval of its $1.57bn buyout of Fidelity & Guaranty Life, the latest regulatory hurdle faced by the Chinese company regarding a US acquisition
Anbang withdrew an application seeking approval for the deal from New York’s Department of Financial Services on May 27, FGL said in a filing to the US Securities and Exchange Commission
The company made the decision after the Department of Financial Services sought on numerous occasions “to obtain information necessary to review and process Anbang’s application”, the department said in a separate statement
Questions have long circulated around Anbang’s shareholding structure. During an eight-month period in 2014, the privately owned company’s registered capital expanded fivefold but the identity of the investors behind the expansion has never been revealed
FGL said in the regulatory filing that it “expects that Anbang and its subsidiaries will refile the NY application in the near future”
Anbang made a global name for itself in 2014 with the $2bn purchase of the historic Waldorf Astoria in New York. It grabbed international headlines again in March this year when its $14bn bid for Starwood Hotels & Resorts came crashing down following speculation about regulatory challenges in China
Given its lack of transparency, questions have been raised about Anbang’s source of funding for its global shopping spree
Anbang also has had issues with Chinese insurance regulators, who limit the size of bids for offshore companies as a percentage of total assets although the definition of the rule is open to question. Many Chinese entities have foreign listings to enable acquisitions without the need to seek regulatory approval at home
The purchase would make Anbang one of the largest insurers by market share in fixed indexed annuity products in the US
