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HSBC interested in the Asian operations being offloaded by Aviva: Bloomberg
Posted on Thursday, 22 August 2019 10:24
UK-based lender HSBC has shown interest in Aviva’s Asian operations as it looks to diversify its insurance presence in the region, people familiar with the matter told Bloomberg.
These sources said the London-listed bank is in the early stages of considering a bid for at least part of the assets being sold by the conglomerate, which confirmed it was offloading the unit in its financial results for the first half of 2019.
HSBC is hoping the addition of the assets will diversify its insurance activity in Singapore and other parts of Southeast Asia; however, the insiders cautioned that no final decision has been made and there is no guarantee of a deal taking place.
An earlier report by Bloomberg, at the start of August, cited people in the know as saying the Asian assets could be worth between USD 3.00 billion and USD 4.00 billion and a formal sales process is expected to start late this year.
Other potential suitors are also expected to bid for the assets, although none were identified by the news provider at this time.
At the start of this month, Aviva released its financial results for the opening two quarters of 2019 and said its board has decided to review strategic options for the assets, which have significant growth and earnings potential.
It recorded operating profit of GBP 1.45 billion in the six months ended 30th June 2019, up slightly from GBP 1.44 billion in the corresponding period of 2018.
Shares in Aviva, which lists its American Depositary Receipts in New York, closed up 2.1 per cent to USD 8.76 yesterday, while in London stocks ended the day at GBP 3.59, giving a market capitalisation of GBP 14.33 billion.
HSBC was trading slightly higher when the bell rang on 21st August at GBP 5.98 and a market value of GBP 120.47 billion.
It has not been easy sailing for the lender in recent weeks, given chief executive John Flint left the company after 18 months and the head of its China business resigned the same week.
Zephyr, the M&A database published by Bureau van Dijk, shows there have been 162 deals targeting insurance carriers and related activities groups in the Far East and Central Asia announced in 2019 to date.
The largest of these, which is also the biggest in the sector globally in the year so far, involves FWD Group Financial Services of Singapore buying SCB Life Assurance in Thailand for THB 92.70 billion (USD 3.01 billion).
© Zephus Ltd