London-based banking giant HSBC Holdings Plc may be considering a bid to take over the Asian operations of Aviva Plc as part of a push for further business diversification in the region, according to reports from Bloomberg.
Sources at the publication said HSBC was in the early stages of weighing an offer for at least part of Aviva’s Asian business.
The UK insurer confirmed earlier this month that it was examining options for a sale of its Asian business as part of a new strategy designed to revitalise the company.
Aviva’s shares have dropped 27% over the last 12 months but it is hoped that the appointment of new CEO Maurice Tulloch in March 2019 will help the company achieve a turnaround.
Estimates suggest Aviva’s operations in Asia could be valued at between $3 billion and $4 billion, with an official process expected to begin later this year.
However, sources at Bloomberg stipulated that HSBC has not yet made any final decisions regarding a potential bid, and added that there was no guarantee that the deliberations would result in a transaction.
Several other suitors are also considering an offer for the Aviva assets, people familiar with the matter said.
For HSBC, a takeover of Aviva’s Asian operations could help it to bolster its insurance presence in Singapore and other parts of Southeast Asia.
This could be a critical move for the bank considering its relatively small presence in the area, and given that Hong Kong, where it generates more than half of its pre-tax profit, has been thrown into economic uncertainty following weeks of increasingly tense protests.