China’s UCF Group backs $914m deal for HK insurer

A clerk counts Chinese yuan and U.S. dollar banknotes at a branch of Bank of China in Taiyuan

China UCF Group Co., the conglomerate led by businessman  Zhang Zhenxin, is backing the acquisition of Hong Kong Life Insurance Ltd. in a deal valuing the insurer at HK$7.1 billion ($914 million).

Hong Kong Life’s owners, including Chong Hing Bank Ltd. and Oversea-Chinese Banking Corp., agreed to sell their holdings to an investment firm called  First Origin International Ltd., according to a filing late Monday. It didn’t disclose the buyer’s ultimate shareholders. UCF Group is the owner of First Origin, a spokeswoman for Hong Kong Life said by phone Tuesday, confirming an earlier Bloomberg News report.

First Origin’s shareholders could still change to allow minority partners to join UCF Group in the Hong Kong Life purchase, people familiar with the matter said, asking not to be identified because the deliberations are private. The company agreed to continue distributing Hong Kong Life’s policies on a non-exclusive basis through the branch networks of most of the banks that previously controlled the insurer, one of the people said.

UCF’s agreement marks at least the third attempt by a mainland financial institution to buy a Hong Kong insurer as they seek to cater to surging Chinese demand for offshore insurance-linked products. The buyer will need to get Chinese regulatory approval at a time of rising scrutiny on overseas dealmaking after the record $247.9 billion wave of foreign acquisitions last year by the nation’s companies.

First Origin has paid a non-refundable deposit of HK$710 million, equal to 10 percent of the transaction value, according to a Hong Kong exchange statement from Chong Hing. The money would compensate Hong Kong Life owners if a buyer fails to secure regulatory approvals such as clearance to move the acquisition funds out of China, people familiar with the matter said earlier this month.

UCF Group didn’t immediately respond to emailed queries.

Shares of Hong Kong Life shareholder Asia Financial Holdings Ltd. rose 7.9 percent to HK$4.37 at the mid-day break in Hong Kong, on track for the biggest gain since May 2015. Hong Kong Life’s owners were advised by Nomura Holdings Inc. and Goldman Sachs Group Inc. on the sale, the people said.

UCF Group, founded in 2003, has businesses ranging from leasing and foreign exchange to online investment and property, with branches in China, Hong Kong, the U.K. and the U.S., its website shows. The company is chaired by Zhang, who is the largest shareholder of Hong Kong-listed Credit China FinTech Holdings Ltd. and was previously an executive at a top Chinese brokerage.

Also read:

China: UCF consortium in late-stage talks to buy Hong Kong Life Insurance Ltd

Insurance-tech will face regulatory barriers in Asia: Samuel Hall, Startupbootcamp Fintech

Bloomberg

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.