Bloomberg
HONG KONG — Citigroup Inc. has reached a deal to sell its $3 billion stake in China Guangfa Bank to China Life Insurance Co., according to people familiar with the matter.
The New York-based bank C, -1.65% is offloading the 20% stake to China’s biggest life insurance company by premiums. Citigroup purchased its holding in 2006 as part of a consortium of investors brought in to clean up the Chinese lender. Citigroup is exiting its stake because it no longer fits with the bank’s strategic plans for China, where it operates its own branch network, according to a person familiar with the situation.
The Wall Street Journal first reported in December that Citigroup was in talks to sell its stake. Citigroup’s stake in 2006 was valued at about $620 million, meaning the bank earned a tidy profit on the investment over the years. However, the sale won’t have a material impact on Citigroup’s upcoming earnings report in April, according to the person. The deal is expected to close in the second half of this year, the person said.
