US insurance giant merges joint-ventures
- Source: Global Times
- [10:48 June 12 2010]
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MetLife's expansion over the past 10 years includes its acquisition in March of a subsidiary of US insurance giant AIG for $15.5 billion. Photo: CFP
By Zhou Mi
US insurance company MetLife will retain the headquarters of both its Beijing and Shanghai-based joint ventures, following the merger of the two announced this week.
"We will keep operations in both Beijing and Shanghai, with a plan to operate with a multi-city headquarter structure, but we expect that Shanghai will be the legally-registered headquarters," MetLife said in a press release, adding the new name will be Sino-US United MetLife after the merger.
MetLife announced on Wednesday that the assets of its Beijing-based Sino-US MetLife joint venture will be merged into its Shanghai-based United MetLife to form a single company.
The merger was prompted by the fact that MetLife was technically breaking Chinese rules by having more than one joint venture in the country.
Sino-US MetLife was founded by Capital Airports Holding Co. (CAH) in Beijing and MetLife in 2004. In 2005, MetLife took over the insurance division of Citigroup globally, including its joint-venture in China with Shanghai United Investment, which then became United MetLife. The two partnerships meant MetLife held two licenses to run insurance businesses in China.
The rules forbidding eligible foreign financial institutions from acquiring more than one insurance company were reiterated in new insurance company equity regulations which took effect on Thursday.
"We knew of the regulation that foreign enterprises cannot own two insurance companies and had communicated with the China Insurance Regulatory Commission (CIRC) when we acquired Citigroup's insurance division. They understood our special circumstances and had given us adequate time to resolve this issue", MetLife said in the press release.
MetLife has not yet said how it will discharge the second insurance business license that it still holds.
No one from CIRC was available for comment Friday.
