Posted on May 17, 2012 by Sergio Ulloa
ING Groep may see a flurry of activity in the near future as it has received multiple bids for their asset management operations in Asia, as well as seeing multiple parties squaring up to bid on their Asian life insurance assets.
ING must sell off their global insurance business in order to fulfill their agreement with the European Commission and repay the US$7 billion bailout it received in 2008. A growing number of companies are throwing their hats in the ring for ING's Asian asset management and life insurance businesses.
The asset management business has so far attracted the attention of Nikko Asset Management, Macquarie Group, Principal Financial Group and Singapore's United Overseas Bank to list but a few of the participants. The auction could see ING's Asian asset management business valued at around US$500 million.
Also on the sale block is ING's Asian life insurance business, and given the number of suitors cueing up to take over the operations it may turn into a bidding war that could net ING upwards of US$6 billion.
The U.S.'s two largest life insurance companies are preparing to put forwards bids for the life insurance business, with MetLife hiring Credit Suisse and Prudential Financial hiring Bank of America Merrill Lynch to advise their respective clients on potential bids. Manulife Financial is also considering a bid, having hired Citigroup to advise them, while Sun Life Financial from Canada is also contemplating a bid. Samsung Life Insurance has declined to participate in the initial bidding process although it has said that it may reconsider and place a bid if changes to the sales method were made.
ING's life insurance business currently has operations that are either wholly owned or operated as joint-ventures in Japan, South Korea, China, Hong Kong, Singapore, India, Thailand and Malaysia. However, some operations may be more or less desirable for different companies, based on what markets the potential suitor wishes to expand in.
While the bidding process is just getting off to a start, it has the potential to turn into a serious windfall for ING, as the US$6 billion estimate is almost 20 percent higher than previous estimates.