HONG KONG: FWD Group, an insurer backed by Hong Kong billionaire Richard Li, is nearing a deal to acquire the life insurance operations of Siam Commercial Bank in Thailand, according to people familiar with the matter.
Talks between FWD and SCB are advanced after three months of exclusive negotiations, and an announcement could come as early as Monday, the people said, asking not to be identified because the matter is private.
SCB Life Assurance could be valued at about US$3 billion, they said. At that price tag, it would be the biggest acquisition of an insurer in Southeast Asia, according to data compiled by Bloomberg.
In March, the companies confirmed a Bloomberg report that they had reached a preliminary pact on a potential life-insurance partnership and entered into exclusive talks. A deal would see FWD acquire SCB Life and sign a long-term distribution agreement with the bank.
There’s no certainty the talks would result in a transaction as deliberations are ongoing, the people said.
As any potential transaction has not yet been finalised, the company declined to comment further at this stage, a representative for FWD said in response to Bloomberg queries. Thana Thienachariya, senior executive vice-president for external communication at SCB, couldn’t be reached for comment.
FWD has been buying insurance assets across Asia. On Friday, it agreed to buy MetLife’s Hong Kong insurance unit in a deal that would help FWD expand its presence in the former British colony.
In October, it acquired control of Commonwealth Bank of Australia’s Indonesian life insurance arm, and a year earlier it purchased the Japanese life unit of AIG, after having previously done other deals in Singapore and Vietnam.
“An IPO of FWD is probably an eventuality for the pan-Asia life insurer as it expands quickly via M&A,” Bloomberg Intelligence analyst Steven Lam wrote on June 26.
FWD, which manages about $30 billion worth of assets and is backed by Swiss Re AG, had more than 3 million customers spread across eight Asian markets, according to its website.
Li, the younger son of Hong Kong’s richest man, formed the company after spending $2.1 billion to buy the insurance and pension units in Hong Kong, Macau and Thailand of the Dutch bank ING in 2013.