ING announced on 18 October that it has reached an agreement to sell its life insurance, general insurance, pension and financial planning units in Hong Kong and Macau, and its life insurance operation in Thailand, to Pacific Century Group (PCG) for a combined consideration of US$2.14 billion (€1.64 billion) in cash.
The agreement is part of the previously announced intended divestment of ING’s Asian insurance and investment management activities. In this context, ING announced last week it reached an agreement to sell its Malaysian insurance activities for approximately €1.3 billion. The process for the remaining businesses is on-going. Further announcements will be made if and when it is deemed appropriate.
“We are pleased to have found in Pacific Century Group a good home for our customers, employees and agents with the ambition to continue to expand the businesses in these countries,” said Jan Hommen, CEO of ING Group. “This transaction underscores the steady progress we continue to make in our restructuring.”
The agreement values ING’s Hong Kong, Macau and Thai combined life insurance businesses at 24.3 times estimated 2012 earnings and 1.9 times estimated 2012 book value of €865 million, both on an IFRS basis. Earnings until closing are to the benefit of PCG. At closing, ING expects the transaction to deliver a net gain of approximately €1 billion.
ING is a top 10 life insurer in Hong Kong, Macau and Thailand. In Hong Kong and Macau, where it offers general and life insurance products as well as pension and financial planning services, ING serves more than 270,000 customers through approximately 400 employees and 1,600 tied agents. In Thailand, where ING offers life insurance as well as pension products, ING serves more than 300,000 customers through about 480 employees and over 4,000 tied agents.
PCG is a private firm founded in 1993 by Richard Li. Over the years, PCG has built interests in financial services, real estate, satellite communications, media and telecommunication services in Asia. Richard Li is the Chairman of HKT, the largest telecom operator in Hong Kong, and the major shareholder of PineBridge Investments, a US-based asset manager with US$68 billion under management globally.
ING Investment Management's funds management businesses in Hong Kong and Thailand are outside the scope of this transaction. The transaction announced today does not impact ING's Asian banking activities.
The transaction is subject to regulatory approvals and is expected to close in the first quarter of 2013.