Old Mutual Plc has put its 50% stake in an insurance joint venture with the Chinese state-run power group Guodian Corp. up for sale, Reuters reported April 6, citing "people with direct knowledge of the matter."
Old Mutual is consulting financial advisers on the stake sale and may sell its holding to one or more local firms, Reuters reported.
As part of a group restructuring exercise, Old Mutual is planning to exit noncore and smaller operations. However, the purported sale is not a certainty and may be dropped if the bids don't match the insurer's expectations, Reuters' sources said.
The U.K.-based group's move is also informed by the tough competition that foreign joint ventures face from local insurers in China, where foreign insurers' stakes are capped at 50%, Reuters reported. Joint ventures with foreign partners own less than a 10% share of the Chinese market.
An Old Mutual spokesman declined to comment. Old Mutual-Guodian Life Insurance Co. Ltd. did not respond to an email, the newswire said.