Hong Kong tycoon Richard Li’s Pacific Century Group is stepping up its search for assets in Southeast Asia after spending more than $2 billion to acquire insurance units at home and in Macau and Thailand.
The company has been considering options to extend its presence over the last six to 12 months, Ronald Arculli, who was named chairman of the insurance unit FWD Group, yesterday said in an interview. The group will pursue acquisitions or strategic partners and new licenses, he said.
“Southeast Asia is the more obvious of the opportunities,” Chief Operating Officer Julian Lipman said in the same interview. The growth of the “under-served” insurance markets in Indonesia, Vietnam and the Philippines are all attractive, he said.
The move puts Richard Li, son of Asia’s richest man Li Ka-Shing, in competition with Japanese insurers that have targeted the region’s growth potential to counter an aging society and shrinking population at home. Acquirers from Japan have outbid rivals, spending more than $1.4 billion in Southeast Asia so far this year, according to data compiled by Bloomberg.
In October last year, Richard Li agreed to buy ING Groep NV’s insurance and pension units for 1.64 billion euros ($2.3 billion) in Hong Kong, Macau and Thailand. It was his second foray into insurance after he sold his holding in Hong Kong insurer Pacific Century Insurance Holdings Ltd. to Fortis, the Belgian-Dutch financial services company, in 2007.
Meiji Yasuda Life Insurance Co., Japan’s third-biggest life insurer, in July agreed to buy a 15 percent stake in Thai Life Insurance Pcl for about 70 billion yen ($719 million), a person familiar with the matter said at the time. The deal valued Thai Life at a multiple of 5.9 times its net assets at the end of March, more than double the average of 17 publicly traded Thai insurers, according to data compiled by Bloomberg.
Tokio Marine Holdings Inc. said in July it wanted to expand within the region, while Sumitomo Life Insurance Co. is among companies preparing to bid for a stake in the life insurance unit of PT Bank Negara Indonesia, people with knowledge of the matter said in June.
Richard Li will not overpay if the company finds itself outbid, Arculli, who was the former chairman of Hong Kong Stock Exchanges & Clearing Ltd., said.
“Richard has been around the block more than once or twice, he’s not likely to go overboard and pay over the odds,” he said.