AIA leads race for ING's $2 billion worth SE Asia insurance units: sources

Tue Sep 11, 2012 7:21am EDT
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By Denny Thomas

HONG KONG (Reuters) - Asian insurer AIA Group Ltd (1299.HK: Quote) has emerged as the front-runner to buy ING's ING.AS Malaysia and Thailand insurance operations, sources with knowledge of the matter said, in a deal that could be worth about $2 billion.

AIA's purchase of ING's Southeast Asian business would be a key step forward in the Dutch group's long and complicated effort to auction off its Asia business.

"AIA has made some headway and they are already engaged with the regulators," said one person familiar with the discussions.

Malaysia and Thailand could be the first piece sold in ING's Asia divestment plan, which was launched earlier this year. ING originally had wanted to sell the whole Asia insurance operations, which has a book value of 6.1 billion euros ($7.8 billion), to one buyer.

Hopes for that, however, faded after ING failed to attract a suitor for the entire Asian piece, forcing the company to auction off its Asia group in parts.

ING officially launched the sale of its Asian insurance and asset management operations in March, though the process was long in the making. ING has been forced to sell assets after it was rescued by the Dutch government with a 10 billion euros ($12.8 billion) bailout during the 2008 financial crisis.

AIA is a former unit of U.S. insurer AIG (AIG.N: Quote), itself the recipient of a 2008 government bailout, which at one point ballooned to $182 billion. AIA, dragged down by AIG's woes, was spun off from its parent in a 2010 IPO.

It is now Asia's third-largest insurance company, and is moving quickly to expand its reach. AIG has kept an ownership stake in AIA, which has been whittled down to 13.7 percent.   Continued...

The logo of the AIA tower is seen at its entrance in Hong Kong July 13, 2010. REUTERS/Tyrone Siu