At a value of US$93 million, the stake equates to VND36,000 ($1.7) per share while PVI closed the August 17 session at its ceiling price of only VND16,400. When the deal is completed, PVI will increase its charter capital to VND2 trillion ($97.1 million) from VND1.6 trillion ($77.7 million).

“Talanx is now our second largest shareholder after PetroVietnam and the only shareholder in the insurance field,” said PVI’s Chairman Nguyen Anh Tuan.

“We will be represented on the supervisory board as well as the management board. We will share our knowledge of the insurance business for the benefit of both sides,” said the German group’s chairman Christian Hinsch.

On explaining why Talanx Group chose to be a strategic shareholder of the PVI in the context of a declining stock market, Hinsch said: “We have been investing outside of Germany for more than 30 years, and investing in Vietnam is part of gaining a foothold in the Southeast Asian market.”

Vietnam is a dynamic and promising economy, while there is a low penetration rate in the insurance industry, he commented. “We don’t look at the moment, but we look at the long-term benefits. That is why we invest,” he said, adding that rising and falling is in the nature of a stock market.

VNS