Li Ka-shing Tipped to Beat Manulife for ING’s Hong Kong Insurance Business

This article is a rewrite of a report from October 2012.

ING’s break-up sale of its Asian insurance operations was set for a verdict as early as that week in October 2012: barring surprises, PCCW chairman Richard Li would beat Manulife Financial to the Hong Kong business, while AIA was the frontrunner for Malaysia.

Why was ING selling?

To repay the Dutch state’s crisis-era bailout. The Dutch government injected capital into ING during the financial crisis; to repay it, ING had to sell its insurance operations by 2013. When news broke in May 2012, Richard Li had already declared interest in ING’s Asian business; when ING switched from a whole sale to a break-up in August, his interest held.

Why did Li have the edge?

He would take Japan too. Foreign wires had reported Manulife’s interest in ING Hong Kong, but Li was willing to buy ING’s Japanese business as well, while Manulife hesitated. Sources said the Hong Kong business was worth not the rumoured US$1 billion but at least US$2 billion.

What about Malaysia?

AIA the frontrunner at US$1.6–1.7 billion. Hong Kong media reported ING’s talks with AIA over Malaysia were nearly done, with an announcement due that week. An analyst noted ING’s top-tier Malaysian market share made it a positive fit for AIA’s Asian footprint — though ING Malaysia’s new-business-value ratio lagged AIA’s, limiting the growth kicker. AIA fell 0.84% to HK$29.70 the day before, unmoved by the deal talk.

What is the lesson from 2012?

Four years after the crisis, Asian insurance assets were the prize. ING’s 2012 break-up sale marked European institutions offloading quality Asian assets to repay state aid — with buyers from Hong Kong tycoons to regional giants signalling confidence in Asia’s insurance growth story.