HSBC Holdings Plc (HSBA), Europe’s largest bank, agreed to sell its U.S. insurance manufacturing business to Enstar Group Ltd. (ESGR:US) for about $181 million in cash.
The final price will depend on the valuation of the business and the amount of capital it has upon completion, scheduled for the first quarter of 2013, London-based HSBC said today in a statement. The unit concentrates on contracts written for consumers, according to its annual report.
Stuart Gulliver, chief executive officer since January 2011, is seeking to cut costs by $2.5 billion to $3.5 billion and revive profit by selling assets to focus on emerging economies in which the bank has a greater market share. He has overseen more than 36 asset sales and closures, including the disposal of its U.S. credit card unit to Capital One Financial Corp. The bank’s 2003 purchase of Household International Inc. required the bank to set aside more than $65 billion for souring loans in North America.
“HSBC group companies in North America will continue to support client needs and offer creditor and life insurance products to their customers through third-party providers,” the bank said in the statement.
Enstar, based in Bermuda, buys assets from insurers seeking to exit businesses.
-- Editors: Jon Menon, Steve Bailey
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