Fosun to Double Its Stake in Portuguese Bank

(Beijing) — Globally minded private equity firm Fosun International said on Tuesday it will nearly double its stake in a leading Portuguese bank to as much as 30%, aiming to expand the European lender’s services to China and other developing markets.

Fosun will accomplish its stake increase by purchasing more stock in Banco Comercial Portuges (BCP), which also goes by the name Millennium BCP, through a share rights plan, according to a Fosun statement to the Hong Kong Stock Exchange.

That plan will let Fosun buy more of the bank’s shares at a discount of nearly 40% to their last trading price. Fosun could ultimately boost its stake to up to 30% through the plan after previously buying 16.7% of BCP last year for about 175 million euros ($184 million).

Fosun said its connections and new capital from its investment will help BCP expand in Greater China and also other developing markets.

“After the completion of the transactions, BCP is expected to become an important investment of the group and become the comprehensive financial service platform to help the group extend its business in Europe and Africa,” Fosun wrote in a statement.

In addition to China, Fosun cited Poland, Mozambique, Angola and Switzerland as markets where BCP will target future expansion.

The stake increase will follow Fosun’s purchase of 80% of Caixa Geral de Depositos SA’s insurance unit, one of Portugal’s top insurers, for 1 billion euros in 2014. Those moves come as the company tries to build up a global portfolio of companies in the financial services sector.

But Fosun also suffered a setback in those goals just a month ago, when it announced it will sell Ironshore Inc., a major U.S. insurer, for about $3 billion just a year and a half after buying the company. Fosun had originally planned to make an initial public offering for Ironshore to get back some of its investment. But that plan was later called into question after Fosun revealed its original purchase was being reviewed by the U.S. agency that checks all major cross-border transactions for national security concerns.

Contact reporter Yang Ge (geyang@caixin.com)