JD Capital Said Among Bidders for $1 Billion Dah Sing Life Arm

  • Dah Sing narrows list of bidders for life insurance operations
  • Country Garden, China Life chosen to proceed to next round

JD Capital, the Chinese investment firm that agreed to spend more than $1 billion on a Hong Kong insurer last year, is among bidders picked to submit second-round offers for Dah Sing Financial Holdings Ltd.’s life insurance operations, people familiar with the matter said.

Chinese property developer Country Garden Holdings Co.China Life Insurance Co. and Canada’s Sun Life Financial Inc. were also among suitors chosen to make bids in the next round, the people said, asking not to be identified because the discussions are confidential. Some initial offers valued the Hong Kong insurance business at more than $1 billion, according to the people. 

Future Land Development Holdings Ltd., a Shanghai-based real-estate firm, is also bidding for the business, according to one of the people. Second-round bids are due by the end of April, the people said.

Dah Sing Financial, which controls one of the last independent Hong Kong banks, said in January it is exploring options for its life insurance operations and the rights to distribute the products through its bank branches. The company is pushing to unlock the value of the business at a time when Hong Kong insurers are seeing big increases in product demand from mainland Chinese customers.

Temasek Backing

A spokeswoman for Dah Sing declined to comment, while representatives for Country Garden and Future Land said they couldn’t immediately comment. Spokeswomen for China Life and JD Capital didn’t immediately respond to phone calls seeking comment. 

Sun Life said in an e-mailed statement it is committed to enhancing its Asian operations and has been investing in businesses around the region. It declined to comment on any interest in Dah Sing.

Chinese developers are seeking opportunities to sell Hong Kong insurance products to home buyers in the mainland, according to the people. Purchases of insurance and related investment policies by mainland Chinese visitors to Hong Kong rose 30 percent last year to HK$31.6 billion, according to the city’s insurance regulator. Country Garden was a close runner-up to JD Capital in the auction for the Ageas Hong Kong business, the people said.

Interest in the Dah Sing unit comes even after a wave of new restrictions on insurance policy purchases in Hong Kong aimed at limiting Chinese buying of the products and controlling capital outflows. Such purchases allowed individuals wanting to move money abroad a convenient way around China’s foreign exchange controls. Hong Kong’s insurance regulator warned last year of growing money laundering risks through policies that combined a life insurance element and an investment component.

JD Capital, which is backed by Temasek Holdings Pte and Allianz SE, is seeking to double down on the Hong Kong insurance market after agreeing in August to buy Ageas SA’s local life business for HK$10.7 billion ($1.38 billion). The Beijing-based asset manager, which also runs brokerage, payment processing and peer-to-peer lending businesses, saw that deal as a way to build out a greater China insurance platform, the people said.

A year ago, Dah Sing Banking Group was viewed as a takeover target after other independent Hong Kong lenders were snapped up by larger buyers. Yue Xiu Group, an investment arm of southern China’s Guangzhou city, completed a $1.5 billion acquisition of Chong Hing Bank Ltd. in 2014. Singapore’s Oversea-Chinese Banking Corp. bought Wing Hang Bank Ltd. for about $5 billion that same year.

— With assistance by Jonathan Browning, Emma Dong, and Vinicy Chan

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