Dah Sing sell life insurance subsidiaries
Dah Sing Financial Group has reached an agreement to sell the life insurance businesses of Dah Sing Financial Holdings Limited (DSFH) in Hong Kong and Macau to the Fujian Thai Hot Investment Company (Thai Hot).
It also intends for those businesses to enter into a long term distribution partnership with Dah Sing Bank, in Hong Kong and Banco Comercial de Macau (BCM) in Macau.
The consideration for the transaction is HK$10.6 billion in cash, and is subject to regulatory and shareholders’ approvals as well as the satisfaction of certain customary closing conditions.
Thai Hot will pay HK$8 billion as consideration for Dah Sing Life Assurance Company Limited and Dah Sing Insurance Services (collectively Dah Sing Life) as well as Macau Life Insurance Company (Macau Life).
In separate bancassurance agreements that will commence upon the completion of the sale of Dah Sing Life and Macau Life, Dah Sing Life and Macau Life will pay HK$2.6 billion in aggregate to Dah Sing Banking Group Limited (“DSBG”) in exchange for 15-year exclusive bancassurance partnerships with Dah Sing Bank and BCM.
A portion of the HK$2.6 billion payment will be paid in annual instalments over the first ten years of the agreement. Under the new bancassurance agreements, Dah Sing Bank and BCM will be compensated by Dah Sing Life and Macau Life on insurance commission, sales incentives and cost reimbursement for distributing the life insurance products of Dah Sing Life and Macau Life in a manner similar to the current arrangement.
According to Dahsing, this agreement follows the group’s announcement in January 2016 that it was exploring strategic alternatives for its wholly owned life insurance business and life insurance product offerings through the group’s banking operations. The agreement with Thai Hot does not affect the group’s general insurance subsidiaries, Dah Sing Insurance Company (1976) and Macau Insurance Company.
David Shou-Yeh Wong, chairman of DSFH and DSBG, commented: “We are pleased to have entered into an agreement that creates shareholder value for both DSFH and DSBG while preserving the strong bancassurance distribution partnership between Dah Sing Life and Macau Life and our banking group.”
Harold Wong, managing director and chief executive of DSBG, said: “Dah Sing Banking Group is committed to delivering high quality products and services to all our customers. Today’s agreement improves the group’s already strong financial position and is designed to provide our banking customers with continued access to high quality life insurance products. This transaction is another step forward for our group as we continue to execute our medium term strategy adopted a few years ago and strive to create value for all of our stakeholders.”
