JD GROUP PUTS HK INSURER UP FOR SALE

China firm hires Citigroup to find buyer for FTLife, say sources

CHINESE financial firm JD Group has put its Hong Kong insurance business, FTLife Insurance Co Ltd, up for sale and a deal could fetch between US$2 billion (RM8.37 billion) and US$2.5 billion, said sources.

JD Group, a financial holding firm, has hired Citigroup to run the sale and second-round binding bids are expected in coming weeks, the sources said.

Earlier this year, local media reports had indicated that JD Group could be looking to offload a part of FTLife.

A sale of the whole business, if completed, will be one of the top five insurance merger and acquisition deals ever here, a key market for insurers due to rapidly growing wealth and demand for insurance products from Chinese investors, Refinitiv data shows.

Hong Kong is home to a developed life insurance market, with a life and health insurance premium to gross domestic product ratio of 17.94 per cent last year, the second-highest in Asia after Taiwan, said Swiss Re.

JD Group acquired FTLife for HK$10.7 billion (RM5.86 billion) in 2016 from Belgian insurer Ageas NV, underscoring Chinese companies’ strong appetite to grow through acquisitions in the Hong Kong financial sector.

Potential bidders for FTLife are expected to include Hong Kong conglomerate Chow Tai Fook and Asian private equity firm PAG, said the sources.

JD Group could decide to retain a minority stake in FTLife, one of the sources said, adding the sale could also attract a bid from a Japanese insurer looking to tap the rapidly growing Hong Kong insurance market.

JD Group, which has brokerage, trust, mutual funds and private equity businesses, was once the most valuable company on the Chinese National Equities Exchange and Quotations, the country’s most active over-thecounter equity exchange.

JD Group is looking to exit FTLife at a time when China is cracking down on privatelyowned financial holding firms, whose sprawling business shareholdings and overseas investments have raised some concerns amid a wider deleveraging exercise.