Richard Li Tzar-kai stepped up his game in the financial market by agreeing to pay US$2.14 billion for ING's insurance business in Hong Kong, Macau and Thailand yesterday.
The acquisition, at 1.9 times estimated book value of the target, will help Li's Pacific Century Group tap into the mainland and Southeast Asian markets.
It is also a strategy in step with his father Li Ka-shing's succession plan to provide him with cash while minimising competition between him and his elder brother Victor Li Tzar-kuoi, who will take the helm of the family property group Cheung Kong (Holdings) and conglomerate Hutchison Whampoa.
"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 deal values ING's Hong Kong business at about US$2.1 billion and the Thai unit at less than US$200 million, said one person familiar with the deal.
The deal is expected to close in the first quarter of next year and is subject to regulatory approvals.
HSBC was the sole financial adviser to Richard Li, while Goldman Sachs and JP Morgan advised ING on the deal.
ING Hong Kong and Macau operations, which serve more than 270,000 customers, boast about 400 employees and 1,600 agents. In Thailand, the company has about 480 employees and more than 4,000 agents.
Earlier this month, the Dutch banking group agreed to sell its Malaysian insurance business to Hong Kong-based insurer AIA for US$1.7 billion.
A deal with ING would follow Richard Li's purchase of PineBridge Investments, a US$68 billion investment manager, from American International Group, AIA's former parent, in 2010. In March that year, Pacific Century Group completed the US$500 million purchase of PineBridge.
ING is trying to sell its insurance and investment management businesses before the end of next year as part of efforts to repay the €10 billion (HK$101 billion) bailout it received during the global financial crisis.
Li, who is the chairman of PCCW, also controls HKT Trust, HKT and Pacific Century Premium Developments. In 2007, he sold his stake in Pacific Century Insurance to Fortis.
Additional reporting by Bloomberg