Two Dozen Bidders Vying for AXA Wealth Management Unit

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By Ben Myers

AXA SA (EPA: CS) is looking to sell its Hong Kong wealth management unit. Roughly two dozen bidders, primarily from China, are pursuing the sale, Reuters reports. The French insurer is selling the unit as part of its plan to focus on fast-growing Asian businesses.

AXA Wealth Management HK Ltd. offers investment- and savings-linked insurance products. The unit is expected to be valued at $500 million, according to sources close to the matter.

Word of the sale has attracted numerous buyers. Acquiring the unit will allow the buyer to get a foothold in Hong Kong’s insurance sector without having to go through the lengthy process of acquiring a license.

Interest in AXA’s wealth management unit is primarily from Chinese state-owned corporations, insurers, property companies and private investment groups, according to sources. Country Garden Holdings Co. (HK: 2007) and China Taiping Insurance Holdings (HK: 0966) are among the companies vying for AXA Wealth Management.

News of the deal comes as Hong Kong’s insurance sector has seen an explosion of merger and acquisition deals, particularly from wealthy Chinese investors. Increased sales of policies from those on the mainland have pushed policy sales higher.

Hong Kong has the second-highest life insurance premium to GDP ratio and generates $48 billion in insurance premiums. While a big market in Asia, Hong Kong’s insurance market is small compared to the U.S., which generates $1.3 trillion in premiums.

Still, Hong Kong’s market has seen significant growth. Premiums were projected to grow 9.2% in 2016.

In 2016, Fujian Thaihot Group, a China-based company, purchased Dah Sing Financial’s life insurance business in an historic $1.4 billion deal. The acquisition was Hong Kong’s most expensive merger and acquisition in the insurance industry.

Dah Sing is one of the only family-run banks in Hong Kong, and has a network of 70 branches on the mainland, in Hong Kong and in Macau.

Thaihot paid three times Dah Sing’s 2015 embedded value in its insurance unit. Embedded value refers to the net asset value of the insurer plus the current value of any potential future profits from current health and life insurance policies.

Country Garden Holdings Co and China Taiping Insurance Holdings Co Ltd were also interested in Dah Sing Financial’s insurance unit. Canada’s Sun Life Insurance Inc. had also been among the companies looking to purchase the unit.

AXA Wealth Management is one of the last life insurers up for sale in Asia’s financial industry, sources say.

AXA is looking to close the sale of the unit in the next few months.



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