--ING to sell asset management and insurance operations in Asia
separately
--ING's Asian asset management information memorandum to go out
first
--AIA considering buying insurance operations; Prudential
Financial, MetLife, Manulife likely to be approached
--Asset management to be of interest to asset managers and
banks, especially from North Asia
--Some investors wary of ING Japan insurance business and
variable annuity book; sale may include reinsurance
(Updates with potential buyers in 10-11th paragraphs, ING Japan
insurance operations and variable annuity book in 12th paragraph,
and plans to sell China, India and South Korea joint ventures in
final paragraph )
By Prudence Ho and Alison Tudor
HONG KONG (Dow Jones)--Dutch financial services company ING
Groep NV (INGA.AE) is expected to formally kick off the sale of its
Asian insurance and investment-management business when it sends
information memoranda to interested parties in April, people
familiar with the matter said Thursday.
ING in early January put the Asia business on the block after it
scrapped plans to float it along with its European insurance
operations. The tough European market climate made a combined
initial public offering inviable.
People familiar with the situation have said that the Asian
investment-management and insurance units will be sold separately.
Investment management will be offered first. However, in some
markets--like South Korea and Japan--the investment-management
business handles funds for the insurer so are closely linked.
Information memoranda on the Asian insurance business being sent
to potential buyers will go out a few weeks after that for
investment management, the people said, adding that bidders
typically have between four and six weeks to digest the literature.
The information memorandum contains broad information of the
franchise for sale.
ING declined to comment.
ING's Asia unit had US$54 billion under management as at the end
of Dec. 2011, according to its website. It had a presence in China,
Hong Kong, Taiwan, Japan, Korea, Singapore, Malaysia, Thailand and
India.
Asset managers and banks--particularly from North Asia--will be
interested in the ING businesses, one of the people said.
"It's rare that a sizeable Asian asset-management unit comes up
for sale. A long queue of firms will be keeping an eye on it," the
person said.
Selling the insurance and asset management divisions separately,
especially if at a premium, would allow ING to make more money out
of its asset sales than from one single sale, one person said. The
insurance business, which is expected to worth around US$6 billion,
is likely to attract a wide group of insurers although only a few
are likely to be serious contenders for the whole business.
AIA Group Ltd. (1299.HK), the Asian life insurer partly owned by
American International Group Inc. (AIG) is considering buying the
insurer, people familiar with the situation said earlier. U.S.
Prudential Financial, the No.2 U.S. life insurer, the nation's
largest life insurer MetLife, Inc. and Canadian-listed Manulife
Financial Corp. (MFC) are also likely to receive the information
memorandum for the insurance business, said people familiar with
the matter. Sun Life Financial Inc. (SLT.T), Canada's third-largest
life insurer by assets, has said it would be interested as
well.
Japanese insurers are also likely to express interest in the
sale, the people said. Korean insurers, KB Financial Group, which
currently has a life insurance joint venture with ING in Korea and
South Korea's Samsung Life Insurance, have said they would be
interested in the ING Asia's insurance business, though it's not
clear whether that is just the Korean operations. ING's biggest
insurance operations in the region by sales are in South Korea and
Japan. ING's Korean operations are slightly larger than its
business in Japan; in the first three quarters of 2011, ING Life
Korea contributed about 43% of ING Asia's gross premiums and about
39% of underlying profit.
One sticking point in the insurance sale could be buyers'
wariness of taking on ING's Japanese variable annuity book, which
contains guaranteed returns to investors, the people said. This
concern is likely to be offset to some extent by ING's information
memorandum which is likely to say reinsurance contracts with ING Re
will be included in the sale, the people added. Including the
reinsurance contracts in the sale will reduce potential exposure to
losses from the guaranteed annuities.
ING is planning to sell its three insurance joint ventures in
India, China and South Korea separately, said people familiar with
the matter, because the respective joint venture partners and
regulators will have to be consulted and the process may be
relatively longer.
-By Prudence Ho and Alison Tudor, 852-2802-7002;
prudence.ho@dowjones.com; alison.tudor@wsj.com