China Construction Bank to buy life insurer-paper

BEIJING, Feb 22 (Reuters) - China Construction Bank (0939.HK: Quote, Profile, Research, Stock Buzz) (601939.SS: Quote, Profile, Research, Stock Buzz) is considering two domestic acquisitions totalling 3.5 billion yuan ($490 million) to diversify into insurance and other financial service sectors, the 21st Century Business Herald said on Friday.

The newspaper said CCB, which has yet to make significant forays overseas, may buy a 51 percent stake in Happy Insurance, a domestic life assurer, for 1.2 billion yuan.

Beijing last month authorised banks to buy into life insurance firms, and vice versa, further breaking down barriers between China's segregated financial sectors.

Happy Insurance's controlling shareholders had agreed to sell out to CCB and the deal was now awaiting regulator approval, the paper said.

Cinda, an asset management firm, and its affiliates together control 55.22 percent of Happy Insurance's equity. Other shareholders include Chery Automobile, Shaanxi Coal and Wuhu Construction and Investment Corp.

Cinda, which has long-standing ambitions for an initial public offering, was established in 1999 to dispose of CCB's bad loans.

Happy Insurance started business in October 2007 with registered capital of 1.16 billion yuan.

The paper also said CCB would buy an 80 percent stake in Xingtai Trust Co Ltd, for at least 2.3 billion yuan, with a strategy of diversifying into other financial service sectors.

An official in the bank's news department said he had no information about either reported deal. ($1=7.1439 yuan) (Reporting by Zhou Xin; Editing by Alan Wheatley)