HONG KONG, Sept 1 (Reuters) - Ping An Insurance Co, the world's second-biggest insurer, has agreed to buy a further 32 percent of Shenzhen Development Bank for 29.1 billion yuan ($4.3 billion) to get a controlling stake in the Chinese lender, Ping An said in a statement on Wednesday.
Ping An will fund the deal using cash and by selling its entire 91 percent stake in Ping An Bank Co Ltd. The deal will also lead to the merger of Ping An's banking unit with Shenzhen Development Bank, giving Ping An Insurance control of a lender with a total net asset value of 45.74 billion yuan.
"The company will gain control of a bank of a larger scale, ... optimise the resource allocation of the banking business within the group and contribute to the more balanced development among its three major business segments, namely insurance, banking and investment," Ping An said.
Ping An, which is transforming itself into a bancassurer, is aiming to tap growing demand for financial products in the mainland, where penetration levels of insurance products are among the lowest in the world.
The insurer will buy 1.64 billion new shares to be issued by Shenzhen Development Bank at 17.75 yuan each.
In May, Ping An bought 520.4 million shares in Shenzhen Development Bank from Newbridge for about 11.45 billion yuan, making it the lender's biggest shareholder. Then in June it acquired 379.58 million new shares in the bank in a private placement valued at 6.93 billion yuan, bringing its total holding to 29.99 percent.
Shenzhen Development Bank has 300 branches in commercial cities including Beijing, Shanghai, Tianjin, Chongqing, The insurer had said in June said it was planning to merge Ping An Bank and Shenzhen Development Bank, a medium-sized lender with a national presence.
The deal will help Ping An to operate under new Chinese insurance rules, which prevent an insurer from controlling more than one financial company that operates the same type of core business.
Shares of Ping An and Shenzhen Development Bank have been suspended from trading since June 30, pending an announcement regarding the consolidation. Ping An will resume trading on the Hong Kong and Shanghai exchanges on Thursday, when shares in Shenzhen Development Bank will resume trading in Shenzhen. ($1=6.807 yuan) (Reporting by Denny Thomas; Editing by Greg Mahlich)