Tycoon Richard Li's FWD Nears $3 Billion Thailand Deal

(Bloomberg) -- FWD Group, an insurer backed by Hong Kong billionaire Richard Li, is nearing a deal to acquire the life insurance operations of Thailand’s Siam Commercial Bank Pcl, according to people familiar with the matter.

Talks between FWD and Siam Commercial are advanced after three months of exclusive negotiations, and an announcement could come as early as Monday, the people said, asking not to be identified because the matter is private. Siam Commercial’s life insurance unit could be valued at about $3 billion, they said. At that price tag, it would be the biggest acquisition of an insurer in Southeast Asia, according to data compiled by Bloomberg.

In March, the companies confirmed a Bloomberg report that they had reached a preliminary pact on a potential life-insurance partnership and entered into exclusive talks. A deal would see FWD acquire Siam Commercial’s life insurance unit and sign a long-term distribution agreement with the lender.

There’s no certainty the talks would result in a transaction as deliberations are ongoing, the people said.

As any potential transaction has not yet been finalized, the company declined to comment further at this stage, a representative for FWD said in response to Bloomberg queries. Thana Thienachariya, senior executive vice president for external communication at Siam Commercial, couldn’t be reached for comment.

The lender will hold a press conference on July 1 announcing a business partnership that would be “the biggest in Southeast Asia,” according to an invitation received on Friday.

FWD has been buying insurance assets across Asia. On Friday, it agreed to buy MetLife Inc.’s Hong Kong insurance unit in a deal that would help FWD boost its presence in the former British colony. In October, it acquired control of Commonwealth Bank of Australia’s Indonesian life insurance arm, and a year earlier it purchased American International Group Inc.’s Japanese life unit, after having previously done other deals in Singapore and Vietnam.

"An IPO of FWD is probably an eventuality for the pan-Asia life insurer as it expands quickly via M&A," Bloomberg Intelligence analyst Steven Lam wrote in a note on June 26.

FWD, which manages about $30 billion of assets and is backed by Swiss Re AG, had more than 3 million customers spread across eight Asian markets, according to its website. Li, the younger son of Hong Kong’s richest man, formed the company after spending $2.1 billion to buy ING Groep NV’s insurance and pension units in Hong Kong, Macau and Thailand in 2013.

©2019 Bloomberg L.P.

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