UPDATE 1-Manulife, DBS in $1.2 bln insurance deal for Asia

Wed Apr 8, 2015 6:41am EDT
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* Manulife expects deal to be accretive to EPS in 2017

* Last major Asia "bancassurance" deal until HSBC renews in 2022

* Existing partner Aviva as well as AIA, Pru competed for deal (Adds detail from official announcement, background)

By Denny Thomas and Saeed Azhar

HONG KONG/SINGAPORE, April 8 (Reuters) - Canadian insurer Manulife Financial Corp is paying $1.2 billion to Singapore's DBS Group Holdings Ltd for a 15-year partnership that will allow the insurer to sell products through the lender's Asian branch network.

Manulife will pay the amount upfront to the Singaporean bank, while there will be variable payments based on the success of the partnership, the two companies said in a statement.

Manulife expects the agreement to be accretive to core earnings per share in 2017 and the initial payment is expected to reduce Manulife's regulatory capital ratio by 10 points.

The deal marks the end of Aviva Plc's longstanding arrangement with DBS. Both were partners since 2001.

Aviva was among the players competing for the new partnership that also included AIA Group Ltd and Prudential plc.   Continued...