October 1, 2015 / 7:19 PM / 2 years ago

Exclusive - China's Anbang in the lead to acquire Fidelity & Guaranty Life: sources

(Reuters) - Anbang Insurance Group Co is in the lead to acquire annuities and life insurance company Fidelity & Guaranty Life (FGL.N), according to people familiar with the matter, as more Chinese insurers seek to expand into the United States.

Privately held Anbang has so far prevailed over other bidders, including private equity firms, in the auction for Fidelity & Guaranty Life, the people said on Thursday. There is no certainty that the negotiations between Anbang and Fidelity & Guaranty Life will result in a deal, the people added.

The sources asked not to be identified because the negotiations are confidential. Anbang did not immediately respond to a request for comment. A representative for Fidelity & Guaranty Life declined to comment.

HRG Group Inc (HRG.N), a financial interests holding company backed by Leucadia National Corp (LUK.N) and previously controlled by hedge fund manager Philip Falcone, owns an 80.6 stake interest in Fidelity & Guarantee Life. It said in April that it was exploring a sale of Fidelity & Guaranty Life.

Shares of Des Moines, Iowa-based Fidelity & Guarantee Life rose as much as 10 percent on news of Anbang being in the lead to acquire it. HRG Group shares also rose more that 2 percent in Thursday afternoon trading in New York.

If Anbang clinches a deal for Fidelity & Guaranty Life, which has a market capitalization of $1.5 billion, it would be the Chinese insurer’s first acquisition of a U.S. competitor.

Beijing-based Anbang has already been acquiring assets in other sectors of the economy. For example, it purchased New York’s famed Waldorf Astoria Hotel earlier this year from Hilton Worldwide Holdings Inc (HLT.N) for $1.95 billion.

Anbang and its peers have been seeking to diversify their holdings away from China through the purchase of real estate and other interests, including insurance companies in the U.S. and other markets around the world.

Fosun International Ltd (0656.HK), another large Chinese insurer, completed in May the acquisition of the remaining 80 percent interest, which it did not already own, in Ironshore Inc, a Hamilton, Bermuda-based direct insurance carrier, for $1.84 billion.

Fosun also purchased a U.S. insurance company Meadowbrook Insurance Group Inc, based in Southfield, Michigan, for $433.310 million in cash earlier this year.

Reporting by Mike Stone in New York; Editing by Chizu Nomiyama

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