Ping An Insurance and Shenzhen Development Bank discussing merger

China’s second-largest insurer, Ping An Insurance (SH.601318, HK.2318), is in talks to merge its banking unit with Shenzhen Development Bank (SZ.00001) as a way to deal with Chinese rules prohibiting insurers from controlling more than one lender, Bloomberg reported. Ping An Insurance is buying a 29.99% stake in Shenzhen Development Bank. The merger would give Ping An Insurance control of a lender with US$119 billion of total assets. Last month Ping An Insurance became Shenzhen Development Bank’s largest shareholder after buying 520.4 million shares from Newbridge Capital LLC for about US$1.68 billion. The insurer also received approval this week to buy as many as 379.58 million new shares in Shenzhen Development Bank in a private placement estimated at US$1.01 billion. Meanwhile, shares of both Ping An Insurance and Shenzhen Development Bank were suspended on Wednesday.