J.C. Flowers & Co. LLC, the investment firm founded by financier J. Christopher Flowers, is considering a bid for Asian insurance assets being sold by Dutch financial company ING Groep NV (INGA), two people with direct knowledge of the talks said.
The New York-based private equity firm is interested in some Asian markets such as Japan where ING assets are to be sold, as the whole unit would be too large, said the people, who declined to be identified because the talks are private. It may also bid for Royal Bank of Scotland Group Plc (RBS)’s Direct Line Group insurance business when it’s for sale, they said.
Leveraged-buyout firms including J.C. Flowers and Washington-based Carlyle Group have raised funds targeting banking and insurance businesses as European banks cut assets to meet tougher core capital requirements.
ING, the biggest Dutch financial company, is seeking to sell its Asian insurance business before a European Union deadline at the end of 2013, to help raise 3 billion euros ($4 billion) it still owes the Dutch state. Analysts previously estimated ING’s Asian life insurance businesses -- with operations in South Korea, China, India, Malaysia, Thailand and Japan -- to be valued between 5 billion euros and 6 billion euros.
“We are exploring options for our Asian insurance and investment management businesses,” Ingeborg Klunder, a spokeswoman for the Amsterdam-based firm, said by e-mail, declining to comment further on possible sales.
State Aid Rules
RBS, based in Edinburgh, has to sell its insurance division by 2013 to comply with a EU state aid rules after the lender received a government bailout. The Direct Line unit may be valued at about 4.7 billion pounds ($7.5 billion), according to Gary Greenwood, an analyst at Shore Capital in Liverpool.
A spokesman at RBS’s insurance unit wasn’t immediately available to comment. A J.C. Flowers spokesman declined to comment.
ING Chief Executive Officer Jan Hommen may consider selling bank assets to help raise the 3 billion euros still owed to the Dutch state. The firm said in January it may be more difficult to meet its goal of completing repayment this year.
AIA Group Ltd., the Hong Kong-based financial group, is considering a bid for ING’s Asian units, people with knowledge of the matter said in January. Axa SA, Europe’s second-largest insurer, doesn’t rule out bidding for the operations, the Sunday Telegraph said on Feb. 19, citing Chief Executive Officer Henri de Castries. Korea Life Insurance Co., Samsung Life Insurance Co. and KB Financial Group Inc. may also be interested in part of the operations, according to Korean press reports last month.
The sale process is at an early stage and ING may reach out to global insurers, including Prudential Financial Inc., MetLife Inc., Ping An Insurance Group Co. and Samsung Life Insurance Co., a person with knowledge of the matter said in January.
J.C. Flowers’s most recent fund closed in 2009 after raising $2.3 billion, according to data from the London-based research firm Preqin. In October, the firm agreed to buy the insurance broker Fidea NV from KBC Groep NV, the recipient of 7 billion euros in Belgian rescue funds, for 243.6 million euros. The firm also invested in the U.K.’s Kent Reliance Building Society. Last year, it submitted a joint bid with Apollo Global Management LLC for Irish Life & Permanent Plc’s life assurance unit. The sale was suspended after bids were too low, the seller said.
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