2nd UPDATE: HSBC Agrees To Sell General Insurance Businesses In Several Countries For US$914 Million
March 07 2012 - 2:23AM
Dow Jones News
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 initiatives. 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 for a
combined US$494 million in cash.
At a press briefing in Hong Kong, AXA Group said it will fund
the acquisition through internal resources. The deal, once
completed, is expected to make AXA the number one player in general
insurance in Hong Kong with a 13% market share, said AXA regional
chief financial officer in Asia, François-Valéry Lecomte.
The purchase would mark AXA's goal of becoming the top general
insurance player in Asia by 2015, Lecomte said. He added that the
group targets to be the top three life insurer as well in the next
three years.
In addition, HSBC said it has also agreed to sell its
general-insurance business in Argentina to Australia's QBE
Insurance Group. 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 and Fiona Law, Dow Jones Newswires;
852-2802-7002; joanne.chiu@dowjones.com
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