Dutch lender ING Groep N.V. (ING: Quote) was accepting final round of bids on Monday, the last day for submitting bids, in the auction process for its Asian life-insurance arm, according to media reports. The divestiture is expected to bring in a windfall for ING and could see a price tag of up to $7 billion.
Hong Kong-based ING's Asian life insurance operations consist of eight wholly owned or joint-venture businesses doing business in China, Hong Kong, India, Japan, Malaysia, South Korea and Thailand.
ING is being advised by Nomura Holdings for the sale of its Japanese operations, while Goldman Sachs and J.P. Morgan are advising ING for the rest of the Asian life insurance operations.
Most of the bidders are looking to boost their operations in Asia, which is the currently the world's fastest-growing insurance market. The Asian market is currently dominated by Hong Long-based AIA Group Ltd., partly owned by American International Group Inc. (AIG: Quote), and British insurer Prudential plc (PUK: Quote,PRU.L).
Among the slew of insurance giants vying to acquire ING's Asian life insurance operations, Japan's Dai-ichi Life Insurance Co. Ltd., Canada's Manulife Financial Corp. (MFC: Quote), KB Financial Group, Inc. (KB) and Korea Life Insurance Corp. were reportedly the first to submit their final bids.
Dai-ichi and Korea Life are said to have bid for just the Southeast Asian operation, while KB Financial has submitted a bid for only the South Korean life-insurance operations. Manulife has reportedly bid for the entire Asian operations, except Japan.
Meanwhile, a consortium led by ex-AIA CEO and a former New Zealand rugby player Mark Wilson, backed by private equity firm Blackstone Group LP (BX: Quote) and reinsurer Swiss Re Ltd., has bid for the whole Asian life insurance operations.
AIA itself, led by new CEO Mark Tucker, is also interested in ING's Southeast Asia and South Korean businesses.
Richard Li, the son of Asia's richest man billionaire Li Ka-shing, is in the fray for the Hong Kong, Malaysian and Thailand businesses. Private-equity firms J.C. Flowers & Co. LLC and Apollo Global Management LLC are also said to be in the fray for the Japanese insurance operations.
The bidding trends point towards either selling the whole of the Asian life-insurance operations, or selling the Japanese, South Korean and Southeast Asian operations separately. Japan and South Korea account for about two thirds of ING's Asian business, while Southeast Asian business has been in high demand due to the strong economic growth in the region.
Two North American groups, MetLife, Inc. (MET) and Prudential Financial, Inc. (PRU), were considered strong contenders, but dropped out of the bidding process along with Switzerland's Zurich Insurance Group AG (ZFSVF.PK, ZURVY.PK) and Italy's Assicurazioni Generali SpA (ARZGY.PK).
ING is also taking final bids for its Asian asset-management arm, with Japan's Nikko Asset Management, U.S.-based Principal Financial Group, Royal Bank of Canada, Singapore's United Overseas Bank and Manulife in the fray. The asset management sale is expected to fetch about $600 million.
The proposed divestiture is a part of ING's ongoing asset sale in order to comply with an agreement reached with the European Commission while getting approval for the 10 billion euro Dutch state aid during the financial crisis in November 2008.
The proceeds from the divestitures will be used to repay the government aid. ING has already sold 15.2 billion euros worth of assets across the world.
ING closed Monday's regular trading session at $6.54, up $0.07 or 1.08% on a volume of 1.86 million shares.
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by RTT Staff Writer
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