ING Groep NV (INGA), the largest Dutch financial-services company, is seeking at least $7 billion for its Asian insurance business and has drawn interest from potential suitors including MetLife Inc. (MET), said people with knowledge of the matter.
ING plans to distribute limited financial information on the assets by mid-April, said one of the people, who declined to be identified because the process is private. AIA Group Ltd. (1299), Prudential Financial Inc. (PRU), KB Financial Group Inc. (105560) and Manulife Financial Corp. (MFC) are among other companies studying offers, the people said.
ING is under European Union orders to divest its entire insurance operations before the end of 2013 as a condition for approval of state aid. The firm earlier scrapped plans to create an Asian-European insurer in an initial public offering and said it may sell the Asian business separately, given its greater allure for buyers after European markets worsened.
“Overall the assets are attractive, which you see in terms of investor interest,” said Thomas Stoegner, a London-based analyst at Macquarie Group Ltd. “More than 10 names are mentioned as potential bidders. That will be massively supportive for the selling price.”
ING Shares Rise
ING’s intention is probably to sell the unit in one piece because that is easier and more cost efficient, Stoegner said. Macquarie has an outperform rating on the stock.
ING shares rose 1.8 percent to 6.74 euros in Amsterdam trading today, increasing the company’s market value to 25.8 billion euros. That compared to a 1.1 percent gain in the 32- member Stoxx Insurance 600 Index (SXIP).
AIA, Prudential Financial, MetLife, Manulife and KB Financial have hired advisers to study bids for the ING assets, the people said.
The auction of the Asian insurance unit may not include joint ventures in countries such as China and India, one person said. ING wants to sell the entire business in one deal, though it may consider divesting the Korean operations separately, according to this person. KB Financial, the owner of South Korea’s largest bank, said on March 23 that it is interested in buying ING’s insurance operations in the country.
Valuing the Deal
An ING spokeswoman, Victorina de Boer, declined to comment on the sale. Spokesmen for the potential bidders declined to comment or weren’t available. The Wall Street Journal reported on the interest from MetLife, Prudential Financial and Manulife earlier today, citing unidentified people.
ING’s Asian insurance operations may fetch about 5.8 billion euros ($7.7 billion) in a trade sale, according to Rabobank International analyst Cor Kluis. That would result in cash proceeds of about 4.2 billion euros for ING after payment of debt, the Utrecht, Netherlands-based analyst said by telephone.
ING has invested 5 billion euros of capital in Asia, with Korea and Japan accounting for 1.5 billion euros each, according to a Jan. 17 research report by JPMorgan Chase & Co., which is advising ING together with Goldman Sachs Group Inc. on the sale.
The company also plans to sell its asset management business in Asia as early as April, and the unit may fetch $500 million to $1 billion, one person said.
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