NWS to buy FTLife Insurance for US$2.8bil
Acquisition is biggest insurance M&A deal in Hong Kong
HONG KONG: Hong Kong’s NWS Holdings Ltd has agreed to buy FTLife Insurance Co Ltd for HK$21.5bil (US$2.8bil) from Chinese financial holding firm JD Group, in the biggest-ever insurance acquisition deal in the Asian financial hub.
NWS, the infrastructure, logistics and transport services unit of conglomerate New World Development Co Ltd, expects the deal to help diversify its business and generate recurring income, it said in a statement late on Thursday.
The acquisition highlights the attractiveness of Hong Kong’s insurance businesses, which are receiving a boost from growing wealth in the city and Chinese visitors snapping up foreign currency-denominated products.
Hong Kong’s life insurance market is well-developed, with a life and health insurance premium to GDP ratio of 17.94% in 2017, Asia’s second-highest after Taiwan, according to insurer Swiss Re.
NWS said it will fund its acquisition of FTLife with a combination of internal resources and “committed” financing from global banks. It did not identify the lenders or disclose how much it plans to raise in debt. “This transaction is a significant step towards our goal of building an immersive ecosystem of premium quality offerings to our customers and community,” said Adrian Cheng, executive vice-chairman and general manager of New World Development.
Unlisted Chow Tai Fook Enterprises, a family-held conglomerate best known for retail chain Chow Tai Fook Jewellery Group Ltd, is the biggest shareholder of New World Development.
Reuters reported last month that Chow Tai Fook was among potential bidders for the FTLife equity holding of JD Group, also known by its Chinese name of Jiuding Group.
Beijing-based JD Group bought FTLife for HK$10.7bil in 2016 from Belgian insurer Ageas NV as it sought growth through acquisitions in Hong Kong’s financial sector.
The group has brokerage, mutual funds and private equity businesses, and was once the most valuable firm on the Chinese National Equities Exchange and Quotations, China’s most active over-the-counter equity exchange.
It has invested in over 200 companies, of which about 60 are either listed or in the process of going public, its website showed.
FTLife was the 12th-largest individual life insurer in Hong Kong by annualised premium equivalent, with a 1.4% market share at the end of 2017, according to a September Fitch Ratings report on the company.