Financial Times, July 13, 2012 12:18 am
Sale considered of ING Japanese unit
By Paul J Davies in Hong Kong
Nomura is working on a potential sale or refinancing for ING’s Japanese business as the final round of bidding for the Dutch group’s Asian insurance operations approaches, according to people familiar with the situation.
The Japanese arm and particularly its variable annuity business, which holds billions of dollars worth of difficult to hedge liabilities, has attracted least interest of the three main units up for sale by ING, which also includes its Korean and south-east Asian operations.
Final bids for the units, which could fetch a combined $7bn, are due on Monday after parties that made it into the second round spent eight weeks doing due diligence and preparing their offers.
Goldman Sachs and JPMorgan, which are the main advisers on the sale, Nomura and ING all declined to comment.
The units are expected to be sold separately, or at least without significant chunks of the Japanese business, after two of the strategic buyers with most experience in Japan, MetLife and Prudential Financial of the US, dropped out of the race in the first round.
Only one Japanese bidder, Dai-Ichi Life, remains, while other large strategic bidders, Manulife of Canada and AIA, the Hong Kong based pan-Asian insurer, are mainly interested in the south-east Asian business and potentially the Korean unit, according to people with knowledge of the process. Sun Life of Canada, which has a much smaller Asian presence, may also still bid.
Mark Wilson, a former chief executive of AIA, is reported to have backing from a consortium including private equity group Blackstone and reinsurer Swiss Re to launch a bid for the full set. However, analysts and bankers with knowledge of the process thought it would be much more difficult for a financial buyer to get regulatory approval in all the different countries.
Mr Wilson, who declined to comment, worked very closely with Blackstone’s advisory team on a planned initial public offering of AIA in 2009 when its former parent AIG of the US was looking to raise capital by selling the group.
That IPO was overtaken by the ultimately abortive bid for the group from Prudential of the UK in 2010. Mr Wilson was ousted from AIA as that process collapsed in acrimony and Mark Tucker, a former chief executive of the Pru, was brought in to pursue a fresh listing of AIA in October 2010.
Blackstone had been approached to work with Richard Li, son of Li Ka-shing, in his bid for the south-east Asian operations of ING, according to a person familiar with the talks. However, it did not believe the unit would be competitive as a standalone business, the person said.
Richard Li is preparing a final bid for the south-east Asian unit and has plenty of funding since his billionaire tycoon father pledged financial backing for his son’s business ventures.
ING’s Korean arm has attracted separate interest from two leading domestic financial companies, Kookmin and Korea Life.