MassMutual Asia has been sold to fintech platform Yungfeng Financial Group and several Asia-based investors.
MassMutual International, the Hong Kong-based subsidiary of Massachusetts Mutual Life Insurance Company, will receive approximately $1.01bn (£788m, €892m) in cash and 800 million shares of Yunfeng Financial Group, equivalent to approximately 24.8 % of the expanded share capital of Yunfeng Financial Group.
In turn, Yunfeng Financial Group will hold a 60% stake in MassMutual Asia.
The other strategic investors that will hold the remaining interest in MassMutual Asia are: Meyu International (9.8%); City-Scape, managed by GIC’s private equity group (7.5%); Sheen Light Development (5%); Sina Corporation (5%); API (Hong Kong) Investment (5%); Harvest Billion International (4.9%); and Giant Investment (HK), a wholly-owned subsidiary of Giant Network Group, (2.8%).
Eddie Ahmed, chairman, president and chief executive of MassMutual International, said: “This transaction provides us with the ability to capitalise on the long-term success and value of MassMutual Asia, creating a true, full service financial services firm, well-equipped to serve a wide range of customers – from high net worth individuals to an emerging universe of customers with rising incomes.
“Further, through our ongoing stake in the combined Yunfeng and MassMutual Asia business, we will continue to capitalise on an expanding number of opportunities in this tremendous, growing and dynamic part of the world.”
Terms of deal
As part of the terms of the deal, MassMutual International will have representation on both the Yunfeng Financial Group and MassMutual Asia boards of directors.
Additionally, MassMutual will enter into an agreement with Yunfeng Financial Group to explore “strategic partnership and business cooperation opportunities”.
Yu Feng, chairman of Yunfeng Financial Group, said: “The long term vision of Yunfeng Financial Group is to leverage its fintech capabilities to develop a financial service ecosystem that offers a broad range of financial services and products, along with high quality expert advice.
“This transaction is a milestone step of Yunfeng Financial Group becoming a financial conglomerate, integrating its existing fintech focused financial services with traditional insurance business. It will create a remarkable synergy between Yunfeng Financial Group and MassMutual Asia, taking both parties’ businesses to new heights.
“MassMutual Asia’s insurance products will broaden Yunfeng Financial Group’s financial product offerings and significantly contribute to the building of its financial service ecosystem, given that insurance and annuity products are indispensable in overall financial planning.”
Yunfeng Financial Group offers financial services, including securities brokerage, wealth management and investment, corporate finance consultancy, ESOP (Employee Stock Ownership Plan) administration, and investment research.
Other deals
MassMutual is not the only firm looking to part with a life insurance business within the M&A merry-go-round.
Chinese financial firm JD Group has put its Hong Kong insurance business, FTLife Insurance Company, up for sale, according to Reuters.
A deal could reportedly raise between $2bn and $2.5bn. The Beijing-based financial holding firm has reportedly hired Citigroup to run the sale.
It is understood that second-round binding bids are expected in coming weeks.
