AIA, Manulife crunch numbers as final ING bids loom

* Manulife may bid for all Asia operations

* Southeast Asia life insurance operations in hot demand

* Nikko, UOB expected to bid for asset management business

HONG KONG, July 16 (Reuters) - A wide range of suitors, from

the son of Asia's richest man and a former rugby player in New

Zealand to more established players including AIA Group

and Manulife Financial Corp, are expected to

submit binding bids on Monday for ING Groep's Asia

insurance business in a deal that could top $7 billion.

ING is selling its Asian life insurance and its asset

management units in the region as it needs to repay bail-out

funds it received from the Dutch government during the 2008

financial crisis. Since the bail-out, ING has sold 15.2 billion

euros ($18.6 billion) worth of assets around the world.

ING CEO Jan Hommen scrapped a joint IPO of ING's Europe and

Asia units in favour of an Asia sale about six months ago. Since

then, the worsening euro zone crisis has put some potential

buyers off big M&A bets. Metlife and Prudential

Financial Inc, considered strong contenders for ING's

insurance business, have dropped out of the process.

ING's Southeast Asian operations have generated the most

interest, with Japan's Dai-ichi Life Co Ltd, South

Korea's KB Financial Group, Korea Life Insurance Co

Ltd and two groups expected to submit second-round

bids for parts of the business, sources familiar with the

process said, declining to be identified because discussions

were confidential.

One consortium is led by ex-AIA CEO and a former rugby

player Mark Wilson, backed by private equity firm Blackstone

Group LP and Swiss Re, while the other is

headed by Richard Li, son of billionaire Li Ka-shing, which is

likely to be interested only in the Hong Kong, Malaysia and

Thailand businesses.

Wilson was in charge of AIA when it planned an initial

public offering in 2009, but was replaced the following year

after a failed bid for AIA by British insurer Prudential Plc

.

There is some scepticism over either consortium having a

chance of winning.

"It gets complicated when you bring a private equity fund

into the picture," said Hong Kong-based Keefe, Bruyette & Woods

insurance analyst Stanley Tsai. "They will need an exit strategy

in the next two to three years, making the deal more difficult

to execute from a regulatory standpoint."

ING's Southeast Asian operations alone may fetch about $2

billion and could be sold at nearly two times embedded value,

one source said. South Korea and Japan account for about

two-thirds of ING's Asian business, but Japan may prove to be a

stumbling block in the auction due to the 18 billion euros

($21.9 billion) worth of high-guarantee variable annuity

policies the local operation has on its books.

The companies mentioned in this report either declined to

comment or were not available for immediate comment.

BREAK-UP?

Monday's binding bids could set the stage for a final round

of negotiations, after which ING will decide whether to sell the

life business en bloc or break it up and sell Japan, South Korea

and Southeast Asia separately. ING has not set a reserve price,

and Hom m en said in May that Asian divestments would probably

fetch less than 8 billion euros.

Nomura Holdings is helping ING to find a solution for its

Japanese operations, while Goldman Sachs and J.P. Morgan

are advising ING on the rest of the auction.

Manulife may bid for the entire Asian operation, while AIA

is interested in South Korea and Southeast Asia, sources said.

Though some sources said, the Canadian financial company could

also skip Japan.

ING's Asia operations offer a platform for insurers keen to

expand in a region enjoying rapid economic growth. Life

insurance premiums in emerging Asia are forecast to grow 8.7

percent next year, nearly double the world average, according to

Swiss Re estimates.

Binding bids for ING's asset management business are also

due this week, with Nikko Asset Management, U.S.-based Principal

Financial Group, Royal Bank of Canada,

Singapore's United Overseas Bank and Manulife expected

to participate. The asset management sale is expected to fetch

about $600 million.

Source: http://news.yahoo.com/aia-manulife-crunch-numbers-final-ing-bids-loom-205954645--sector.html

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