Richard Li returns to insurance with ING deal

HONG KONG: Hong Kong businessman Richard Li, the younger son of Asia’s richest man, is buying ING’s

Hong Kong, Macau and Thailand insurance units for US$2.14bil in cash, bringing the Dutch financial services company a step closer to paying off its state bailout.

Li’s bid, through unlisted Pacific Century Group, marks his return to an industry he exited in 2007 and would help expand his business empire, which is now made up of telecoms, media and funds management.

He is paying 24.3 times estimated 2012 earnings for the three units. The transaction is subject to regulatory approvals and is expected to close in the first quarter of 2013, according to a statement from ING.

ING is divesting assets across the world to repay the 10 bil euro (US$13.1bil) state bailout it received during the 2008 financial crisis.

Last week, the company announced the sale of its Malaysian insurance business to AIA Group Ltd for US$1.73bil in cash, its first deal in a ninemonth drive to sell off its Asian insurance and investment management assets.

AIA paid 14.3 times 2011 earnings for the Malaysian business.

With the latest deal, ING would be raising a total of US$3.87bil so far from its Asia exit plan, with the divestment of its much bigger Japan and South Korean operations still pending.

”It seems to be going well,” Cor Kluis, an analyst at Rabobank, said on Thursday when Reuters reported the news of Li’s purchase based on sources. Kluis said he had expected the Hong Kong and Thai businesses to be sold for 1.4 billion euros (US$1.84bil) and for the Asian insurance and investment assets to raise 6.1 billion euros in total.

Negotiations to sell ING’s Japan and South Korean operations have been dragging on and it was not immediately clear when the sale of those two units would be announced. Li has also bid for parts of the Japan business, while the South Korea unit is expected to be sold to KB Financial Group.

Li, 45, previously ran an insurance business in Hong Kong, which he sold to Dutch and Belgian financial services firm Fortis in 2007.

Li was a surprise bidder for ING’s insurance operations which attracted interest from global insurers.