ING Group sells Hong Kong, Macau, Thai insurance units to Richard Li
ING Group said it has agreed to sell its Hong Kong, Macau and Thailand insurance businesses to Richard Li Tzar-kai’s Pacific Century Group (PCG) for US$2.14 billion (HK$16.59 billion), as the Dutch banking group scrambles to meet improve liquidity and capital adequacy ratios.
The deal, estimated at nine times estimated book value, is expected to bring ING a step closer to fulfilling conditions stemming from its government bailouts in 2008 and the year after and help Richard Li, younger son of Hong Kong tycoon Li Ka-shing, increase his presence in Hong Kong’s finance sector.
“This acquisition is absolutely in line with PCG’s strategy as a long-term holder and developer of assets and investments in three areas: financial services; technology, media and telecommunications; and property projects,” Richard Li said.
The proposed sale valued ING’s Hong Kong business at about US$2.1 billion (HK$16.3 billion) and the Thai unit at less than US$200 million (HK$1,55 billion), one person familiar with the deal said.
ING Hong Kong and Macau operations boast about 400 employees and 1,600 tied agents. The group serves more than 270,000 customers. In Thailand, ING has about 480 employees and more than 4,000 tied agents.
Earlier this month, the Dutch bank agreed to sell its Malaysian insurance business to Hong Kong-based insurer AIA for US$1.7 billion (HK$13.1 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 I Tzar-Kuoi, 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 (HK$3.88 billion) purchase of PineBridge as AIG sold assets to repay a US$182.3 billion (HK$1.4 trillion) 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) in 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 (HK$24.5 billion), its British internet business and a 33 per cent stake in China Merchants Fund, an investment management joint venture.
The company also raised about US$ billion (HK$23.3 billion) last month by selling 54 million shares of United States-based Capital One Financial.
The ING transaction is expected to close in the first quarter of 2013 and is subject to regulatory approvals. HSBC acted as sole financial advisor to PCG and JP Morgan acted as ING’s advisor.