NETHERLANDS - Fortis is still waiting for approval from the Chinese regulators to complete its €2.15bn joint venture with Chinese insurer Ping An, the Belgian Dutch financials firm confirmed today.

Fortis had predicted in April it would get regulatory approval for the joint venture, which would see Ping An buy half of Fortis' asset management business for a consideration of €2.15bn, at the end of the second quarter, though a spokeswoman confirmed today the deal had still not received regulatory approval. (See earlier IPE story: ‘Ping An confirms Fortis deal')

She added even though the company is in a "constant dialogue" with the Chinese authorities, the wait is part of a normal process.

As far as Fortis is concerned, there is no suggestion of Chinese authorities deliberately blocking the deal, as the spokeswoman added: "This is not a delay, we just do not have the regulatory approval yet," she said, adding Fortis expects the deal to close at the end of this year.

The spokeswoman denied the hold up of the deal - intended to bolster Fortis' financial strength - would be problematic for the company, even though Fortis Investments yesterday announcing it ended the quarter with net outflows of €4bn, primarily driven by the global market turmoil in May and June.

Fortis, part of the banking-trio which bought ABN Amro, demerged ABN Amro's asset management from the bank arm in January - an integration which has seen Fortis' asset management business balloon.

Earlier this year, Chinese authorities barred a $2bn investment of the state-owned China Development Bank in Citigroup, while Chinese state investor Citic withdrew a planned investment of $1bn in the recently-collapsed American investment bank Bear Stearns.

This latest delay to completing the deal comes as large pension fund investors such as ABP and PGGM have voiced concerns about Fortis' governance structure, and follows earlier calls by shareholder organisations Deminor and VEB for the company to changes its binational character. (See earlier IPE story: ‘ABP calls for governance change at Fortis')

"On July 17 we said in a letter to Deminor and VEB, in which we responded to a number of their questions, that we do not see a reason at present to change or bi-national structure - one of their main concerns," said the spokeswoman, who said Fortis has not changed its position, though is eager to speak with shareholders.

The company does not want to make any commitments about possible changes to wider governance issues ahead of the shareholders meeting planned for the third week of August.

"We will enter into a dialogue then, and we are of course always happy to look at our structure and to review if it needs to be amended," concluded the spokeswoman.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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