Mergers & Acquisitions

New World Development unit buys Hong Kong insurer FTLife in record US$2.74 billion deal

  • NWS Holdings has agreed to buy in cash the entire issued share capital of FTLife Insurance from Beijing-based JD Capital
  • The deal tops previous Hong Kong insurance record by Yunfeng Financial Group, which acquired MassMutual Asia for US$1.64 billion in 2017
PUBLISHED : Thursday, 27 December, 2018, 10:14pm
UPDATED : Friday, 28 December, 2018, 12:04am

Hong Kong company NWS Holdings will spend HK$21.5 billion (US$2.74 billion) to acquire local insurer FTLife Insurance, in the biggest insurance deal ever completed in Hong Kong.

The unit of New World Development has agreed to buy in cash the entire issued share capital of FTLife Insurance from Tongchuangjiuding Investment Management Group, in a move to diversify the property developer’s business, the company said in a statement on Thursday.

In August 2015, Tongchuangjiuding Investment Management, also known as JD Capital, paid US$1.4 billion to acquire Ageas, which has since been renamed as FTLife Insurance.

“FTLife will be a great addition to the New World family. Given our deep roots in Hong Kong and our focus on the Greater Bay Area, we believe we are the right platform for FTLife to realise its full potential over the long term,” said Adrian Cheng, executive vice-chairman and general manager of New World Development.

New World Development holds a 61 per cent share of NWS Holdings.

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FTLife Insurance reported annual premium equivalent – a measure that allows comparisons of the amounts of new business gained with different proportions of single and regular premium business – at a compound annual growth rate of 36 per cent in 2015 to 2017, according to the statement.

The deal smashed the prior record of US$1.64 billion by Yunfeng Financial Group, backed by Alibaba Group Holding co-founder and executive chairman Jack Ma Yun, which agreed to buy MassMutual Asia, the Asian unit of US-based Massachusetts Mutual Life Insurance in 2017, according to Refinitiv data.

Among other compelling reasons for the deal, New World cited Hong Kong’s ageing population, high savings rate, and growing high net worth population.

“Hong Kong continues to be a favoured destination for mainland Chinese and overseas visitors looking for access to comprehensive world-class financial product coverage,” the company said in the statement.

The city’s insurance industry recorded total gross premiums of HK$347.8 billion in the first three quarters of 2018, an increase of 6.9 per cent from the year-earlier period, according to government statistics. Much of the growth has been driven by mainlanders buying policies and products in Hong Kong.

Alibaba owns the South China Morning Post.