Billionaire Cheng-Backed Firm in Talks for Hong Kong Life

China Strategic Holdings Ltd., an investment firm backed by billionaire Henry Cheng, is in talks to buy Hong Kong Life Insurance Ltd., according to people familiar with the matter.

China Strategic is working with an investment bank as it seeks to acquire Hong Kong Life, whose owners include OCBC Wing Hang Bank Ltd., the people said, asking not to be identified because the matter is private. The insurer has also drawn interest from other potential suitors, the people said.

The owners of Hong Kong Life had revived a sale of the business after a deal was scrapped more than two years ago, Bloomberg News has reported. The insurer could be valued at about $400 million to $500 million, the people said.

China Strategic said on March 24 it was in negotiations with the vendors of an insurance business in Hong Kong for its potential acquisition, without identifying the target company. China Strategic had previously been among bidders for Bank of East Asia Ltd.’s life insurance unit, which AIA Group Ltd. agreed to buy earlier this month.

Founded in 2001, Hong Kong Life provides insurance products from life policies to medical and retirement plans, according to its website. Its owners also include Asia Insurance Co., Chong Hing Bank Ltd., CMB Wing Lung Bank Ltd. and Shanghai Commercial Bank Ltd.

This would mark at least the third attempt by the owners to exit the business, the people said. A previous agreement to sell the operations to investment fund First Origin International Ltd. for $914 million was terminated in 2018.

Listed in Hong Kong, China Strategic’s operations range from investing in securities and loan financing to trading metal minerals and electronics components as well as securities brokerage, according to its website. New World Development Co. Chairman Henry Cheng holds about a 17% stake in the company, according to data compiled by Bloomberg.

Talks are ongoing and no final decisions have been made, the people said. A representative for China Strategic declined to comment and referred to the exchange statement from March 24.

Representatives for Hong Kong Life and Oversea-Chinese Banking Corp., OCBC Wing Hang’s parent, declined to comment, while the other owners didn’t immediately respond to requests for comment.

©2021 Bloomberg L.P.

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