New World Development Company Limited (NWD) has announced that its subsidiary, NWS Holdings Limited, plans to acquire the entire issued share capital of Hong Kong insurer FTLife Insurance Company Limited for HK $21.5 billion (US $2.75 billion) in cash.
NWD explained that the transaction would enhance the diversified business portfolio of NWS Holdings, which is focused on stable, long-term yielding assets in the infrastructure and service sectors, with an added element of long-term growth and solid returns profile.
It was previously reported that a number of companies, including Sun Life Financial, Chinese conglomerate Chow Tai Fook (Holding) Ltd., Asian alternative asset manager PAG, and Singapore sovereign fund GIC Pte, were bidding to acquire FTLife from its owner, JD Capital.
Established more than 30 years ago (having formerly been known as Ageas Insurance Company (Asia) Limited), FTLife offers a comprehensive range of life insurance products, including whole life, term life, endowment, investment-linked, accident and health products.
The company currently has a network of more than 2,500 tied agents, as well as strategic partnerships with more than 230 brokers and independent financial advisers in Hong Kong.
New World Group considers FTLife to be well positioned to benefit from the robust long-term outlook of the Hong Kong life re/insurance industry, and sees the deal as an opportunity to extend its ecosystem of premium products into the insurance sector.
Potential synergies between FTLife and the New World Group include enhanced cross-promotion opportunities and greater connectivity between customers and collaboration with New World Group’s healthcare and wellness portfolio.
The company claimed that FTLife would also benefit from having NWS Holdings as a committed, long-term, strategic shareholder with robust financial strength and a longstanding reputation in Hong Kong and the PRC.
“FTLife will be a great addition to the New World family,” said Adrian Cheng, Executive Vice-chairman and General Manager of NWD. “This transaction is a significant step towards our goal of building an immersive ecosystem of premium quality offerings to our customers and community.”
“Given our deep roots in Hong Kong and our focus on the Greater Bay Area, we believe we are the right platform for FTLife to realize its full potential over the long term,” he added.
Brian Cheng, Executive Director of NWS Holdings, also commented: “We have been impressed by FTLife’s proven strategy to grow FTLife’s business and to improve its competitive position in Hong Kong.”
“FTLife complements our existing business portfolio and will generate solid recurring income to NWS Holdings and create value for our shareholders,” he continued. “NWS Holdings is a committed, long-term, strategic shareholder for FTLife and we are confident in FTLife’s sustainable growth prospects.”
NWS Holdings will finance the transaction with a combination of internal resources and committed external financing, with HSBC and Morgan Stanley acting as joint financial advisors.
Upon completion of the transaction, FTLife will become an indirect wholly-owned subsidiary of NWS Holdings.
