--HSBC agrees to sell general-insurance business in four
territories to AXA Group, QBE Insurance
--62%-owned unit Hang Seng Bank will sell insurance unit to QBE
Insurance
--Deals valued around US$914 million in cash
--AXA, QBE to be exclusive providers of insurance products for
HSBC and Hang Seng Bank in several areas
(Adds completion date in the second paragraph, details of
bancassurance agreements in the third paragraph and comments from
QBE in final two paragraphs.)
HONG KONG (Dow Jones)--Global banking giant HSBC Holdings PLC
(HBC, HSBA.LN) said Wednesday that it has agreed to sell its
general insurance businesses in Hong Kong, Singapore, Argentina and
Mexico to AXA Group and Australia's QBE Insurance Group Ltd.
(QBE.AU) in separate deals valued at around US$914 million in
cash.
The move is part of HSBC's efforts to diversify away from
non-core businesses, while focusing on its core banking operations.
Last year, the company said it would sell its global general
insurance operations as part of cost-cutting efforts. The deals,
which are subject to regulatory approvals, are expected to be
completed in the second half of 2012, while the deal in Argentina
may be completed earlier, HSBC said a statement.
Following the completion of the deals, AXA and QBE will become
the exclusive providers of general insurance products distributed
by HSBC and its Hang Seng Bank unit to retail and commercial
banking customers in Hong Kong, China, Singapore, India, Indonesia,
Mexico and Argentina under 10-year bancassurance agreements, HSBC
said.
It "will enable us to focus our capital and resources on the
growth of our core businesses, including the building of our
broader wealth management capabilities," HSBC Group Chief Executive
Stuart Gulliver said in the statement.
HSBC said that its units, HSBC Insurance (Asia) Ltd., HSBC
Insurance (Singapore) Pte. and HSBC Seguros SA de CV Grupo
Financiero HSBC, have agreed to sell their general insurance
portfolios in Hong Kong, Singapore and Mexico to AXA Group at a
combined cash consideration around US$494 million.
In addition, it has also agreed to sell its general-insurance
business in Argentina to Australia's QBE Insurance Group Ltd.
(QBE.AU). Under the agreement, QBE Insurance will buy
Hong-Kong-based Hang Seng Bank Ltd.'s (0011.HK) general-insurance
manufacturing unit Hang Seng General Insurance (Hong Kong) Co. Hang
Seng Bank is 62%-owned by HSBC Group. The total cash consideration
for both businesses and the bancassurance agreements is around
US$420 million and will be funded from existing internal resources,
QBE Insurance said in a separate statement.
QBE, which operates in 49 countries, has grown through a steady
string of acquisitions in Asia, the U.S. and Latin America in
recent years. The Australian insurer reported gross written
premiums of $18.3 billion in 2011.
-By Joanne Chiu, Dow Jones Newswires; 852-2802-7002;
joanne.chiu@dowjones.com