ING Groep NV
) is set to vend its lucrative Malaysian insurance business to
Asian insurance giant AIA Group Ltd. The deal, which is yet to
receive a regulatory approval, is estimated to be worth
approximately $1.7 billion (€1.3 billion).
ING Groep's Malaysian business comprises of its life insurance
business, employee benefits business and 60% stake in the joint
venture ING Public Takaful Ehsan Berhad. The company anticipates a
net gain of about €780 million from this deal, which is expected to
close in the first quarter of 2013.
The Goldman Sachs Group, Inc.
JPMorgan Chase & Co.
) acted as the chief advisors to ING Groep.
ING Groep is also looking to offload its other Asian assets, which
includes its Japanese, South Korean, Hong Kong and Thai insurance
units. The company is holding talks with several prospective buyers
relating to the divestment. Therefore, the company will have its
commercial and retail banking business in the Asia Pacific region
remaining as it fits with its new banking-oriented strategy.
ING Groep is aiming at divesting its Asian assets, especially its
insurance and investment-management businesses, before the end of
2013. This is mainly for the repayment of $13 billion (€10 billion)
state financial aid, which the company received from the Dutch
government during the financial crisis of 2008. The company also
plans to vend its banking assets to accelerate repayment of the
remaining amount of roughly $3.9 billion (€ 3 billion) with
The selling of Malaysian insurance operations is one of the major
deals in the company's motive to sell off its Asian assets. Earlier
this week, the company had announced a deal to sell its entire
stake in China Merchants Fund (CMF) to the joint venture partners
of the fund namely China Merchants Bank and China Merchants
Securities Co. Ltd. The deal will bring $128 million (€98 million)
in cash to ING and is expected to be completed in the second
quarter of 2013, subject to certain regulatory terms and
Other Global Divestments
Besides selling its Asian businesses, ING has offloaded a couple of
its other global businesses in the last few quarters to streamline
the operations and focus mainly on core banking activities. Last
week, it agreed to sell ING Direct UK - its British online banking
division - to UK banking giant
). The financial terms of the deal were unrevealed.
Earlier, in August, ING Groep announced the sale of ING Direct
Canada - the Internet banking division of ING Bank of Canada - to
The Bank of Nova Scotia
). Further, in February 2012, it completed the sale of its online
banking unit, ING Direct USA, to
Capital One Financial Corp.
We believe completion of such deals will help ING Groep to repay
the bailout funds to the government. Further, it will help the
company to pay more attention to its core businesses amidst a bleak
ING Groep currently retains a Zacks #4 Rank, which translates into
a short-term Sell rating.
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