FWD Group Ltd., the insurance broker backed by billionaire Richard Li, has agreed to buy two Hong Kong units of MetLife Inc. to increase market share, the former said in an emailed statement Friday.
Six-year-old FWD, via its Hong Kong unit, will acquire MetLife Ltd. and Metropolitan Life Insurance Co. of Hong Kong Ltd. for an undisclosed amount, according to the statement, which added the transaction will require regulatory approval.
FWD has gone on an acquisition spree which may pave way for an initial share sale for the insurer that also operates in Southeast Asia and Japan, Bloomberg Intelligence analyst Steven Lam wrote earlier this month. Thailand’s Siam Commercial Bank Pcl said in a regulatory filing in March that FWD had revived talks to buy its life insurance business after a two-year hiatus.
The acquisition of the MetLife units should lift FWD’s share of Hong Kong’s “highly competitive market” to 3.2% from 2.6%, based on last year’s new annual premium equivalent, Lam said. FWD will continue to service all existing MetLife policies in Hong Kong after the acquisition. It also intends to rename the business.
“MetLife Hong Kong is highly complementary to our existing business and the acquisition is another step towards fulfilling our ambition to build a leading pan-Asian life insurance platform,” FWD Chief Executive Officer Huynh Thanh Phong said in the statement. “The acquisition signifies our confidence in the long-term growth potential of Hong Kong.”
The planned deal could value the acquisition targets at less than $400 million, people familiar with the matter told Bloomberg earlier this month. The five largest life insurers, including AIA Group Ltd., Prudential Plc and HSBC Holdings Plc, accounted for 72% of industry sales in 2018. FWD’s purchase would give it a market share nearly the same as the next two players combined, Lam said.