Standard Life has announced that terms have been agreed to sell its Hong Kong insurance business, Standard Life (Asia), to its Chinese joint venture insurance business, Heng An Standard Life Insurance Company Limited (HASL), after 18 years in the region.
The transaction is subject to obtaining local regulatory and other approvals in Mainland China and Hong Kong and it is anticipated that this could take up to 18 months, the company said in a statement announcing the sale. The final consideration will be calculated as at the date of completion and will be payable in cash.
HASL conducts insurance business in China and distributes a range of individual savings, investment and protection products, as well as group protection products, through tied agents, banks, employed sales force and broker companies. It was established in 2003 as a joint venture between Standard Life and Tianjin TEDA International Holding (Group) (TEDA). Standard Life will continue to own 50% of the company,
Standard Life Asia was originally established in 1999 and is an indirect, wholly-owned subsidiary of Standard Life. It is registered as an authorised insurer in Hong Kong to provide long-term savings and investment solutions for customers and distributes products through strategic partnerships with independent financial advisers.
Commenting on the transaction, Sandy Begbie, Executive Lead (Insurance) for China, Standard Life, called the proposed transaction “a major milestone in the development of our insurance business in Greater China”.
“It makes strategic sense to bring Standard Life Asia and Heng An Standard Life together. It will form a stronger, single base allowing us to continue to innovate and meet the evolving needs of our Chinese and Hong Kong customers,” he said.
Zhenyu Liu, general manager, HASL, called the transaction ” nother important step” for the business, allowing access to more markets. Liu added that the deal will also result in HASL becoming a Sino-foreign joint venture insurance company, with insurance licences for serving both Mainland China and Hong Kong customers.