(Yicai Global) Aug. 18 -- Yunfeng Financial Group Ltd. [HK:00376] said yesterday that it intends to work with other investors including Ant Financial Services Group, Sina Corp. [NASDAQ:SINA] and GIC Private Ltd. to acquire MassMutual Asia Ltd., a member of US-based MassMutual Financial Group, for USD1.67 billion (HKD13.1 billion).
Yunfeng Financial plans to acquire a 60-percent stake in MassMutual Asia for HKD7.86 billion. HKD2.66 billion will be paid in promissory note or cash and HKD5.2 billion will be paid through a secondary public offering, in which Yunfeng Financial will issue 800 million shares, representing 24.8 percent of its equity capital after the supplementary issuance, at HKD6.5 apiece. The other seven investors will pay cash for the remaining 40 percent of MassMutual Asia.
MassMutual will become the second largest shareholder of Yunfeng Financial after the deal, meaning it will benefit from Yunfeng Financial's growth. Jade Passion Ltd., which is controlled by Yunfeng Capital, is the biggest stakeholder. Yunfeng Capital was founded by Alibaba Group Holding Ltd. [NYSE:BABA] Chairman Jack Ma and David Yu, who founded advertiser Shanghai Ju Zhong Target Media Co. Yunfeng is a combination of one character from each of their Chinese names.
The transaction is pending approval from the Independent Insurance Authority, the SFC and the Mandatory Provident Fund Schemes Authority of Hong Kong and the Monetary Authority of Macao.
MassMutual was established in 1851 and owns Massachusetts Mutual Life Insurance Co. MassMutual Asia carries out business primarily in Macao and Hong Kong, where it is headquartered. Popularity among China's high-net worth individuals has propelled MassMutual Asia's business growth. Its premiums totaled HKD6.9 billion last year, and its personal life insurance business has boasted double-digit average annual growth for many years.
MassMutual Asia ranks among Hong Kong's top ten life insurance firms by regular premium income. Its assets are worth approximately HKD44.5 billion.