Case Study On Shareholder Activism Of Insurance Capital Banner Acquisition

Insurance companies are one of the earliest financial institutions that were approved to enter the stock market.In recent years,the rapidly growing premium income of insurance industry in China has brought about great pressure on its asset allocation,thus principal guaranteed products are in urgent demand.In the macro-environment of low interest rates and asset shortage,insurance companies tend to emphasize on equity allocation.That's how insurance capital banner acquisition become popular in the secondary market.The CIRC published relevant information disclosure criterion to regulate banner acquisition.Many institutional investors change their idea of financial investment and begin to take an active role in target companies'corporate governance,such as entering the board,attending annual general meeting,etc.Some of the deals cause resistance from the management.The others,however,receive support from the management.To meet the market demand and policy encouragement,ascending amount of insurance capital will enter the stock market as long-term capital.Institutional investors such as insurance companies' active behaviors somewhat promote the development of shareholder activism in China.Shareholder activism is to make proactive efforts to take participant in target companies' corporate governance.The requirements are:first,initiative shareholder action;second,take participant in the corporate governance.This paper first explains and reviews the theoretical basis and related literature of institutional activists such as insurance companies,then summarizes the development of shareholder activism in the United States and in China.On this basis and combining of policy,source,motivation and preference of insurance capital banner acquisition,this paper studies on the following cases:Qianhai Life Insurance's banner acquisition of Nanbo Group;Fude Sino Life Insurance and Anbang Insurance group's banner acuire Gemdale Coporation.Thereout,we may discover how insurance companies banner acquire companies and play as shareholder activists,and why these cases receive different results.We may also provide basis for the regulators to improve relevant regulations on insurance capital entering the stock market.