Fosun International made international headlines in 2013 when it purchased iconic New York City skyscraper One Chase Manhattan Plaza for $725 million.
This move demonstrated that the Shanghai-headquartered conglomerate was interested in establishing a global presence outside of Chinese borders. The firm is now doubling down on this proposition, as reports indicate it is planning to spend $2.4 billion on acquiring five insurers across the U.S., Europe and Asia.
Chief executive Liang Xinjun told
The Wall Street Journal that insurance companies remain appealing because their deep pockets of capital allow for worthwhile returns on investment.
“Insurance is the most important business segment for us—the build-out of insurance gives us a cheap and sustainable source of funding,” Liang told
WSJ. “The persistent low interest rate environment in the U.S. and Europe has made the acquisition targets there look more attractive.”
Although Liang declined to name any of the target acquisitions, outlets are reporting that Fosun’s next step is to acquire a 52.3% stake in Israeli insurer Phoenix.
In a recent press release on the Fosun website, the company boasts that it follows the Buffett strategy of taking an “insurance + investment” approach to business growth, allowing it to earn profit in both financials and assets.
“In 2014, the operating revenue from the insurance segment hit RMB 7.868 billion, up 2,742.3% year-on-year, and contributed to 12.7% of the Group’s total revenue,” said the statement.
Its website also reveals plans to enhance the conglomerate’s “healthcare and happy and fashionable lifestyle” sector, which it has been heavily investing in for years.
The holding company not only purchased Club Med this year, but it also acquired a 5% stake in the British travel firm Thomas Cook Group. It is currently undertaking several initiatives for expansion in tourism, including opening seven new resorts in Canada, Italy, Brazil, the Maldives and China.
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