ING Groep NV (INGA), under European Union orders to sell assets, is near an agreement to sell its Malaysian insurance business for as much as $1.7 billion to AIA Group Ltd. (1299), two people with knowledge of the matter said.
The Dutch bank is in final negotiations with AIA, the third-largest Asia-based insurer, and may sign the accord as soon as tomorrow, the people said, asking not to be identified because the talks are confidential. Victorina de Boer, a spokeswoman for Amsterdam-based ING, and Emerald Ng, a Hong Kong-based spokeswoman for AIA, declined to comment.
ING is required to sell its insurance and investment- management businesses before the end of 2013 after getting 10 billion euros ($13 billion) of state aid during the financial crisis. While executing the imposed divestment program, it’s also selling banking assets to help speed up repayment of a remaining 3 billion euros with premiums.
ING’s shares rose as much as 0.8 percent in Amsterdam. They climbed 0.1 percent to 6.40 euros at 4:08 p.m., extending this year’s gain to 15 percent.
In the last six weeks, ING announced an agreement to sell its Canadian on-line bank for $3.16 billion, its U.K. Internet business and a 33 percent stake in China Merchants Fund, an investment management joint venture. The firm also raised about $3 billion last month by selling 54 million shares of Virgina- based Capital One Financial Corp. (COF:US)
ING’s Asian insurance and asset-management business had a combined book value of 6.6 billion euros, the bank said on Sept. 27. The company’s operations in the region include emerging markets such as Malaysia, where rising incomes are fueling demand, and Japan, which is grappling with deflation and an aging population.
AIA Chief Executive Officer Mark Tucker has been trying to revive new business growth after the insurer was hurt during the global financial crisis because of woes at its bailed-out former parent American International Group Inc. (AIG:US) Tucker said in February that AIA would pursue acquisitions only when they add value to investors and were financially viable.
Last month, the company agreed to pay $109 million to buy 92 percent of Aviva NDB Insurance Plc (CTCE), Sri Lanka’s second- largest life insurer, from London-based Aviva Plc (AV/) and National Development Bank.
The purchase of ING’s Malaysian operations would help increase AIA’s market share in the country to 19 percent, lifting its ranking to third-largest from fifth, Sally Ng, an analyst at China International Capital Corp., said in a report to investors dated yesterday.
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