Greentown real estate developers plan to purchase major shares in Wanda Group’s life insurance unit has collapsed after failing to get approval from China’s financial regulator.
In December, Greentown agreed to purchase 900 million shares of Aeon Life Insurance from Wanda Group, who have been selling assets over the last two years to pay off debts.
Greentown had initially agreed to pay 2.7 billion yuan ($377 million) for the shares, which would have been equivalent to around 11.6% of the insurance firm.
The deal was expected to be completed by June 26 but failure of approval from the China Banking and Insurance Regulatory Commission led Greentown to announce this week that the deal was off.
Greentown’s executives said they didn’t know why the deal was not approved, though one analyst believed it failed to meet the regulator’s standards in some way. Other real estate firms have made similar moves into financial services in the past few years, often to gain easier access to financing tools.
While Greentown officials might be disappointed, the same may not be true for the firm’s investors. The company’s Hong Kong-listed stock tripped slightly on Monday following the announcement, but leaped almost 4% on Tuesday.
The stock is additionally around 30% ahead of where it was right after the initial deal was announced last in December 2018.