Edinburgh-based Standard Life plc said terms have been agreed to sell its Hong Kong insurance business Standard Life Asia to Standard Life’s Chinese joint venture insurance business Heng An Standard Life Insurance Company Limited (HASL).
Standard Life continues to own 50% of HASL.
Heng An Standard Life general manager Zhenyu Liu said HASL would have access to more markets once the transaction was completed.
“It 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,” said Zhenyu Liu.
The transaction is subject to local regulatory and other approvals in mainland China and Hong Kong and this could take up to 18 months.
“The final consideration will be calculated as at the date of completion and will be payable in cash,” said Standard Life.
Earlier this month, Standard Life agreed to buy Aberdeen Asset Management for about £3.8 billion in an all-share transaction that would create a global fund management player overseeing £660 billion of assets.
Standard Life Asia was 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 services and distributes products through strategic partnerships with independent financial advisers.
HASL conducts insurance business in China and was established in 2003.
HASL is a joint venture between Standard Life and Tianjin TEDA International Holding (Group) Co., Limited (TEDA).
HASL distributes savings, investment and protection products through tied agents, banks, employed sales force and broker companies.
Sandy Begbie, Executive Lead (Insurance) for China, Standard Life plc, said: “The proposed transaction is a major milestone in the development of our insurance business in Greater China, further strengthening our relationship with TEDA.
“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, while also enhancing our growth potential.
“Today’s announcement emphasises Standard Life’s ambitions in Asia.”
Standard Life Asia chief executive Alan Armitage: “By leveraging the existing expertise and talents, the Hong Kong operation will become an important gateway for Heng An Standard Life to the Hong Kong insurance market.
“The proposed transaction is an important strategic development which will allow us to further develop our proposition for customers and grow our presence in the region.”