Richard Li Tzar-Kai

Richard Li close to a deal on ING's insurance units

The Dutch bank will part with its Hong Kong and Thai business for as much as US$2.2b

PUBLISHED : Friday, 19 October, 2012, 12:00am
UPDATED : Friday, 19 October, 2012, 3:33am

ING Group, under European Union orders to divest assets, is near an agreement to sell its Hong Kong and Thailand insurance businesses to Richard Li Tzar-kai, three people familiar with the matter said.

The Dutch bank is in final negotiations with Li - younger son of tycoon Li Ka-shing - and an announcement may come as early as today, said the people, asking not to be identified because the discussions are private.

The proposed sale may value ING's Hong Kong business at about US$2.1 billion (HK$16.2 billion) and the Thai unit at less than US$200 million, one of the people said.

An agreement with Li would bring ING a step closer to fulfilling conditions stemming from its government bailouts in 2008 and the year after.

Earlier this month, the Dutch bank agreed to sell its Malaysian insurance business to Hong Kong-based insurer AIA for US$1.7 billion.

Victorina de Boer, a spokeswoman for Amsterdam-based ING, declined to comment, as did a spokeswoman for Li who asked not to be identified.

Li's father has pledged financial support for his younger son's ambitions to build his own businesses. Richard Li's older brother, Victor, is the heir to the property-to-ports empire their father created.

Cheung Kong, Li Ka-shing's flagship company, has a market value of US$34 billion.

A deal with ING would follow Richard Li's purchase of PineBridge Investments, a US$68 billion investment manager, from American International Group (AIG), AIA's former parent, in 2010.

In March that year, Richard Li's Pacific Century Group completed the US$500 million purchase of PineBridge as AIG sold assets to repay a US$182.3 billion US government bailout.

The chairman of PCCW, he also controls HKT Trust, HKT and Pacific Century Premium Developments.

Richard Li sold his stake in Hong Kong insurer Pacific Century Insurance to Fortis, the Belgian-Dutch financial services company now called Ageas, in 2007.

ING is required to sell its insurance and investment management businesses before the end of next year after getting €10 billion (HK$102 billion) of state aid during the worldwide financial crisis.

While executing the imposed divestment programme, ING is also selling banking assets to help speed up repayment of a remaining €3 billion with premiums.

In the last two months, ING announced an agreement to sell its Canadian online bank for US$3.16 billion, its British internet business and a 33 per cent stake in China Merchants Fund, an investment management joint venture.

The company also raised about US$3 billion last month by selling 54 million shares of United States-based Capital One Financial.