Hong Kong-based financial services company Yunfeng Financial Group has announced that it would be the main investor in a US$1.7 billion acquisition of insurer MassMutual International's Hong Kong unit, reported Reuters.
The cash and stock deal will add insurance products to the Yunfeng's existing fintech-focused financial services, in what the company called a milestone in its ambitions to become a financial conglomerate.
Yunfeng, which is backed by backed by Alibaba billionaire Jack Ma, will own 60% of MassMutual Asia. The rest will be owned by other investors such as Ant Financial Services, an affiliate of billionaire Jack Ma's Alibaba, as well as Singapore sovereign wealth fund GIC and Chinese Internet and telecoms firm SINA Corp.
The deal will see MassMutual, Yunfeng and Ant enter into a strategic cooperation agreement to explore future business opportunities. Ant has also been expanding rapidly, delving into a range of businesses from wealth management to micro lending.
GIC said in a statement that the prospect of collaboration between the three firms could create "significant value" and that it saw consistent growth for MassMutual Asia in Hong Kong's life insurance industry.
Yunfeng will pay the US insurer $1 billion in cash and 800 million shares valued at HK$6.50 (US$0.83) apiece. MassMutual will have a 24.8% stake in Yunfeng's enlarged share capital.
"We will continue to participate in the growing and attractive Asian markets through our ongoing stake in the combined Yunfeng FG and MassMutual Asia business," said MassMutual chairman, president and CEO Roger Crandall in a statement. "The resulting company will be a full-service financial services firm, well-equipped to serve a wide range of customers, including high net worth individuals and an emerging universe of consumers with rising incomes."
MassMutual Asia has two main units -- one manages its general insurance business, while the other focuses on the Mandatory Provident Fund business, a compulsory pension plan for the retirement of residents in Hong Kong.
MassMutual International said its business in Japan and a joint venture in China were not part of the transaction, and that Yunfeng had indicated it will move forward with MassMutual Asia's employees and management team intact.