Fubon FHC’s Buyout of AIG Antai to Up It to 4th in Life Segment
Written by Writer on Monday, October 20th, 2008
Fubon FHC’s Buyout of AIG Antai to Up It to 4th in Life Segment
Taipei, Oct. 20, 2008 (CENS)-Fubon Financial Holding announced on Oct. 20 the acquisition of ING Antai Life Insurance for US$600 million (NT$19.5 billion, at US$1=NT$32.5), a move which will elevate Fubon’s ranking in the domestic life insurance market to fourth in terms of assets.
Initially, ING Antai and Fubo Life Assurance would have co-existed under Fubon Financial Holding before their merger, with the union to add ING Antai’s 2 million insurees to the 1 million clientele base of Fubon Life Assurance. Fubon Financial Holding stressed that the merger won’t affect the benefits of ING Antai’s clients.
Fubon Financial Holding and ING Antai signed the merger contract last week, with the former to raise the fund for the merger via issuing new shares, financial bonds, and corporate bonds.
Daniel Tsai, chairman of Fubon Financial Holding, reported that the merger will be carried out via share swap, according to which ING Anti will become a 100%-owned subsidiary of Fubon and Fubon will issue new shares for ING group to own 5% stake in the financial holding firm, in addition to paying cash to ING to cover the balance for the deal. ING, in turn, will use the cash to purchase subordinated corporate bonds to be floated by Fubon. ING, therefore, will not withdraw its capital from Taiwan after the merger.
Hans van der Noordaa, board director and chief of the Asia-Pacific operation of ING Group, expressed his happiness for ING to have Fubon as a strong partner in the Taiwanese market, saying that the companies’ life-insurance businesses are complementary and the merged entity will become a leader in the domestic life-insurance market.
Industry insiders noted that ING of Holland is selling ING Antai mainly due to its decision to focus on its core banking business, especially after disclosing, the first time ever, its deficit in the third quarter amounting to 500 million euros.
Founded 20 years ago, ING Antai is the second largest foreign-invested life insurance company in Taiwan, trailing Nan Shan. It boasts NT$612.5 billion of assets, NT$12.8 billion of paid-in capital, a workforce of 8,000, and 7.26% of market share in terms of premium income as of the end of 2007, much higher than the corresponding figures of Fubon Life Assurance: NT$360 billion of assets, NT$5.65 billion of paid-in capital, a workforce of 2,200, and market share of 5.4%.
The merged life-insurance company will boast combined assets of NT$1 trillion, ranking fourth place on the island (trailing Cathay, Nan Shan, and Shin Kong), and market share of 13.9% in terms of total premium income, the second largest.
(by Philip Liu)
