Fortis scraps $4bn asset sales

by David Masters

Story link: Fortis scraps $4bn asset sales

Fortis, the Dutch-Belgian banking and insurance group that was bailed out by the Benelux governments this week, has called off $4 billion of asset sales.

The company had been planning to sell half of its asset management arm to China-based Ping An Insurance Co for €2.15 billion ($3 billion), as well as €709 million ($1 billion) worth of ABN AMRO assets to Germany-based Deutsche Bank.

Both deals have now been cancelled, with Fortis blaming their change of mind on ’severe market disruption’ and continuing worldwide financial turmoil.

A spokesperson for Ping An, the second largest insurance group in China, said the company accepts Fortis’s decision, and understands the situation they are in.

Asked if Ping An planned any other foreign investments, the spokesperson said the company would be keeping a close eye on international markets during this time of ongoing uncertainty.

Earlier this week, Ping An revealed that it would be absorbing larger than predicted losses from its 5% stake in Fortis, causing the company’s profit estimates to fall dramatically.

Fortis was rescued from the brink of collapse on Sunday by an €11.2 billion emergency capital injection from the governments of Belgium, Luxembourg and the Netherlands.