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China’s Jiuding Group (JD Group) is reportedly selling its Hong Kong insurance arm FTLIFE Insurance Co. Ltd, in a deal that could be worth between US$2 billion and US$2.5 billion.
The financial conglomerate has tapped Citigroup to manage the transaction, and second-round binding bids are expected to come in in the next few weeks, according to a report by Reuters which cited three people with knowledge of the matter.
If successful, the deal will become one of the five largest-ever insurance M&A transactions in Hong Kong, which is an important insurance market in Asia due to rapidly growing wealth and an influx of mainland Chinese investors.
It was earlier reported in the Chinese media that JD Group was planning to sell off a portion of FTLife following pressure from regulators in Hong Kong and on the mainland, but it now looks like the whole of the insurance business will be sold.
“This is one of the very few large insurance businesses that you will see coming on the block, so the interest is expected to be good,” one of the sources said.
“It’s not easy to get a new insurance licence in Hong Kong and the wait time could be long. It’s a good opportunity for someone looking to bet on the sustainable premium growth in this market.”
JD Group came into possession of FTLife in 2016, buying it from Belgian insurer Ageas for HK$10.7 billion (US$1.4 billion).
