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

100 Yuan notes are seen in this illustration picture in Beijing November 5, 2013. REUTERS/Jason Lee/Files

A consortium including China UCF Group Co. is vying with Yue Xiu Group to acquire Hong Kong Life Insurance Ltd., according to people familiar with the matter, in the latest attempt by a mainland company to buy an insurer in the former British colony.

UCF is in late-stage discussions with Hong Kong Life’s owners, who are seeking to reach an agreement by the end of the month, according to the people. The Beijing-based financial group is bidding together with Hong Kong-listed Credit China FinTech Holdings Ltd., the people said, asking not to be identified because the information is confidential.

Hong Kong Life’s owners have been discussing a valuation of more than $700 million, one of the people said. Yue Xiu, an investment arm of the southern Chinese city of Guangzhou, also remains in talks, the people said.

A transaction would mark at least the third planned sale of a Hong Kong insurer to a Chinese acquirer in two years. Owners are seeking to capitalize on a surge in interest from mainland customers in offshore insurance products even as regulators attempt to crack down on such sales.

Regulatory Approvals

UCF, 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 Zhenxin, who is the largest shareholder of Credit China FinTech and was previously an executive at a top Chinese brokerage.

There’s no certainty the talks will result in a deal, and another buyer could still emerge, the people said. Emails sent to a general inquiry address on UCF’s website weren’t immediately answered. Representatives for Credit China FinTech, Hong Kong Life and Yue Xiu declined to comment.

Bidders have been asked to agree to a reverse break fee of as much as 10 percent of the transaction value, according to the people. 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, the people said.

UCF is offering to distribute the insurer’s policies on a non-exclusive basis through the branch networks of the banks that currently control Hong Kong Life, the people said. Hong Kong Life investors include a local unit of Oversea-Chinese Banking Corp. as well as Asia Financial Holdings Ltd., Chong Hing Bank Ltd., Shanghai Commercial Bank Ltd. and Wing Lung Bank Ltd., according to its website.

Also read:

Credit China FinTech in talks with ‘multiple’ cos, says more deals coming

MBK Partners to acquire South Korea’s Daesung from Goldman Sachs-led consortium

Bloomberg

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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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