MetLife Joins MassMutual in Seeking Hong Kong SaleBy
Insurer prepares to send out details to prospective buyers
Sale of Hong Kong business could fetch more than $600 million
MetLife Inc. is seeking a sale of its Hong Kong insurance unit, joining international rivals including Axa SA and MassMutual that have pursued divestments in the Chinese territory, people with knowledge of the matter said.
New York-based MetLife is preparing to send out information on the Hong Kong business to prospective buyers in the next couple weeks, according to the people. The sale could raise more than $600 million, one of the people said, asking not to be identified because the matter is private.
MetLife is the latest insurer seeking to cash in on a surge of buyer interest in a coveted Hong Kong insurance license. Mainland companies have been pursuing acquisitions of life insurers and wealth managers in the city, even as China has sought to rein in its citizens’ purchases of investment-type products being sold in Hong Kong.
Axa agreed last month to sell its Hong Kong wealth management unit to a local family office, while a group led by tech billionaire Jack Ma’s Yunfeng Financial Group Ltd. said in August it would buy control of Hong Kong-based MassMutual Asia Ltd. for $1.7 billion.
China’s steps to curb demand for Hong Kong insurance products sent quarterly sales slumping 47 percent in the third quarter of last year. Chinese purchases of these policies fell to HK$10.1 billion ($1.3 billion), according to Hong Kong’s Insurance Authority. Sales peaked in the fourth quarter of 2016 and have fallen quarter-on-quarter ever since.
MetLife Hong Kong has an embedded value of around $400 million, according to the people familiar with the matter. The company could fetch a similar valuation multiple to that achieved with previous disposals such as the Axa sale, the people said. MetLife remains committed to its other Asian operations, including those in South Korea and Japan, one person said.
A representative for MetLife declined to comment.
Shares of MetLife have risen 12 percent in U.S. trading over the past year, giving the company a market value of about $56.7 billion. The benchmark S&P 500 Index gained 25 percent over that period.
MetLife has boosted its business from mainland clients and now ranks as Hong Kong’s 14th largest insurer by total new business in the first nine months of 2017, according to Bloomberg Intelligence analyst Steven Lam, up from 17th in the same period a year earlier.
— With assistance by Alfred Liu