FWD Nears $400 Million Insurance Deal With Vietcombank

(Bloomberg) -- Billionaire Richard Li’s FWD Group Ltd. is nearing an agreement to pay about $400 million for a unit of Vietnam’s biggest lender and a long-term insurance distribution agreement with the bank, people with knowledge of the matter said.

The Hong Kong-based insurer outbid competitors including Prudential Plc, said the people, who asked not to be identified because the information is private. As part of the deal, FWD will buy a business called Vietcombank Cardif Life Insurance, which is owned by Bank for Foreign Trade of Vietnam JSC, known as Vietcombank, and BNP Paribas SA’s life insurance unit Cardif, the people said.

In a so-called bancassurance transaction, an insurer typically pays an upfront amount for exclusive rights to sell its products in bank branches. That’s been a popular way of expanding in Southeast Asia, an area of mostly developing economies with young populations.

Shares of Vietcombank rose as much as 2.3% on Tuesday in their biggest advance since Sept. 13.

Li, the son of Hong Kong’s richest man, is making a big bet on Southeast Asia as FWD paid $3 billion for a life insurance business in Thailand in July. The insurer already has a presence in Vietnam following a small acquisition there in 2016.

An official announcement could still be weeks away, the people said. Representatives for FWD, Vietcombank, BNP Paribas and Prudential declined to comment.

--With assistance from Nguyen Kieu Giang.

To contact the reporter on this story: Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.net

To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, Philip Lagerkranser

©2019 Bloomberg L.P.