AIA, Manulife lead the charge for ING's Southeast Asian assets: sources
ING is exploring a separate sale of its roughly US$1 billion Hong Kong insurance business, sources said, a move that could further complicate the auction of its Asian operations.
The Dutch insurer is selling its Asia divisions to repay a 2008 government bailout. It failed to secure a single buyer for the entire Asian group, valued at about US$7 billion. As a result, ING decided to split the auction into three pieces -- Japan, South Korea and Southeast Asia.
The Hong Kong business was originally lumped in with Southeast Asia, together with Malaysia and Thailand. But with the Southeast Asia sale making slow progress due to foreign ownership restrictions, ING is keen to expedite parts of the nearly six-month old process.
The sources, who declined to be identified as the discussions are confidential, cautioned that ING has not made a final decision.
“Divestment may take place through multiple transactions,” an ING spokeswoman said.
While selling Hong Kong separately may extend the auction process for the Asia business, it could allow ING to extract better value from a buyer focused just on that specific market, sources said.
A successful Hong Kong sale may also allow ING the flexibility to accept lower offers for South Korea and Japan, which have received lukewarm response so far in the bidding.
A consortium led by Hong Kong’s Richard Li, the son of Asia’s richest man, Li Ka-shing, may prove to be a leading contender to buy just the Hong Kong portion from ING, one of the sources said.
Li previously ran an insurance business in Hong Kong, which he exited in 2007 by selling a controlling stake to Dutch and Belgian financial services firm Fortis.
Pan-Asian life insurer AIA Group Ltd and Canadian insurer Manulife Financial Corp are the leading contenders to buy ING’s Southeast Asia operations, sources have previously said. Li’s bidding group has also expressed interest in the Southeast Asia units.
ING’s auction has put the Malaysian and Thai regulators in a bind as the two countries do not allow foreign insurers to buy 100 per cent of domestic insurance operations. ING launched businesses in the two countries before the regulations went into effect.
ING’s Southeast Asian operations are valued between US$2.5 billion and US$3 billion, with Malaysia accounting for about two-thirds of the total value.
An AIA spokeswoman declined to comment. Spokesmen for Manulife and Richard Li also declined to comment.