June 29 -- Ping An Insurance (Group) Company of China (601318,2318.HK) said it had obtained approval from the China Securities Regulatory Commission for its plan to acquire Shenzhen Development Bank (000001.), and was exempted from having to make a tender offer, reports Securities Times, citing a company filing.

According to the restructuring plan, Ping An will subscribe to 1.638 billion shares issued by SDB with its 90.75 percent shareholding in Ping An Bank and 2.69 billion yuan in cash.

Upon the completion of the transaction, Ping An and its subsidiaries will hold a 52.38 percent stake in SDB, which will become a subsidiary of Ping An. Ping An previously held a 29.99 percent stake in SDB.

SDB will hold a 90.75 percent stake in Ping An Bank, with the latter becoming a subsidiary of SDB.

According to the report, the integration will allow SDB to obtain a steady, long-term source of financial support from Ping An. The combined network of the two banks in the Pearl River Delta, Yangtze River Delta and Bohai Rim regions will be the fourth-largest among listed banks.

Ping An has 60 million individual customers and two million corporate customers, added the report.

According to industry insiders, Ping An will be able to help SDB increase operational efficiency and reduce operating cost through the centralization of the back office systems.
The total assets of the two banks will exceed one trillion yuan after the merger, according to the Quarterly Reports of both banks.

SDB contributed 1.145 billion yuan to Ping An's 2010 earnings while it accounted for 464 million yuan of Ping An’s 2011 first quarter earnings.

According to public data, Ping An Bank achieved compound annual growth rates of 32 percent and 55 percent for revenue and net profit during the 2006-2010 period.

Ping An previously said it may complete the integration by the end of the year.