HONG KONG/TOKYO (Reuters) - Japanese group Dai-ichi Life Insurance (8750.T), Korea Life Insurance (088350.KS), and Canadian peer Manulife (MFC.TO) have submitted final round bids for parts of ING’s ING.AS Asian business, sources familiar with the matter told Reuters.
Binding bids for Dutch lender ING’s Asian insurance and asset management operations, valued at about $7 billion, were due Monday.
Offers for the insurance business, which could be Asia’s largest deal in the sector, attracted a range of suitors, from Richard Li, the son of Asia’s richest man, to the former chief executive of Asian insurer AIA (1299.HK), Mark Wilson.
Wilson, backed by private equity firm Blackstone Group LP (BX.N) and Swiss Re SRENH.VX, has bid for the whole Asian operations, a source with direct knowledge of the matter told Reuters.
Richard Li, son of billionaire Li Ka-shing, has also placed an offer for the Hong Kong, Malaysian and Thai businesses, the source said.
ING is selling its businesses in the region to help repay a bailout from the Dutch government during the 2008 financial crisis. Since the bailout, ING has raised 15.2 billion euros ($18.6 billion) selling assets around the world.
Korea Life said it had entered a bid for part of ING’s Asian insurance business.
AIA, led by CEO Mark Tucker, had expressed interest in ING’s Southeast Asia and South Korean businesses in the initial round of bidding. It was not clear if it submitted final bids for both or just one of the two Asian operations.
ING’s Southeast Asian business has been in hot demand, as life insurance premiums in the region have been forecast to grow rapidly on the back of strong economic growth.
Dai-ichi has bid for ING’s Southeast Asia business as well, according a source familiar with the matter. Japanese insurers are under growing pressure to expand overseas as they face weak growth prospects at home.
KB Financial Group (105560.KS) submitted a bid for ING’s South Korean insurance business, another source told Reuters.
ING CEO Jan Hommen scrapped a joint IPO of its Europe and Asia units in favor of an Asian sale about six months ago.
Since then, the worsening euro zone crisis has put potential buyers off big M&A bets. U.S. groups Metlife (MET.N) and Prudential Financial (PRU.N), considered strong contenders for ING’s insurance business, have dropped out of the process.>
Wilson, in charge of AIA when it planned an initial public offering in 2009, was replaced the following year after a failed bid for AIA by British insurer Prudential (PRU.L).
“It gets complicated when you bring a private equity fund into the picture,” said Hong Kong-based Keefe, Bruyette & Woods insurance analyst Stanley Tsai. “They will need an exit strategy in the next 2-3 years, making the deal more difficult to execute from a regulatory standpoint.”
Japan and South Korea account for about two thirds of ING’s Asian business. Reuters has reported that Japan may prove to be a stumbling block in the auction process because of the 18 billion euros high-guarantee variable annuity policies the local operation has on its books.
The bidding companies mentioned in this report either declined to comment or were not available to comment. ING declined to comment.
Monday’s bids could set the stage for breaking up ING’s Asian operations and selling them to different buyers.
ING’s Asian operations offer a platform for insurers keen to expand in a region enjoying rapid economic growth. Life insurance premiums in emerging Asia were forecast to grow 8.7 percent next year, nearly double the world average, according to Swiss Re estimates.
Final bids for ING’s asset management business could not be verified on Monday. Nikko Asset Management, U.S.-based Principal Financial Group (PFG.N), Royal Bank of Canada (RY.TO), Singaporean group United Overseas Bank (UOBH.SI) and Manulife were expected to participate. The asset management sale was expected to fetch about $600 million.
($1 = 0.8208 euro)
Additional reporting by Jung-yoon in Seoul with; Clare Baldwin and Michael Flaherty in Hong Kong; Editing by Ryan Woo and Dan Lalor