Investment and financing platform Yunfeng Financial Group, which was co-founded by (Yun) Ma and majority shareholder and chairman David (Feng) Yu in 2010, will hold a direct 60% stake in the business.
MassMutual Asia is licensed to conduct life and annuity, investment linked long term, permanent health and retirement scheme management long term insurance business in Hong Kong.
It is also licensed to sell life insurance products in Macau through its branch office.
The company’s operations in Japan and joint venture in China are not part of the deal.
Integrate fintech with traditional insurance
Yu said: “The long-term vision of Yunfeng FG is to leverage its fintech capabilities to develop a financial service ecosystem comprising information technology and online and offline platforms that offer a broad range of financial services and products, along with high quality expert advice.
“This transaction is a milestone step of Yunfeng FG becoming a financial conglomerate, integrating its existing fintech focused financial services with traditional insurance business.”
Under the terms of the agreement, parent company MassMutual International will receive approximately $1.01bn (£783.9m, €860m) in cash from all investors, plus 800 million shares of Yunfeng FG at HKD6.50 (£0.64, $0.83, €0.71) per share.
This is equivalent to approximately 24.8% of the expanded share capital of Yunfeng.
The other investors will hold the remaining stake in MassMutual Asia. They include:
- Meyu International Company Limited (9.8%);
- City-Scape Pte. Ltd. (managed by GIC’s private equity group) (7.5%);
- Ant Financial Services Group (5%);
- Sheen Light Development Limited (5%);
- SINA Corporation (5%);
- Harvest Billion International Limited (4.9%); and,
- Giant Investment (HK) Limited (a wholly owned subsidiary of Giant Network Group) (2.8%).
The joint acquisition of MassMutual Asia follows a recent agreement between MassMutual, GIC and Blackstone to acquire Goldman Sach’s remaining stake in Rotheysay Life.
“This transaction represents a significant step forward for MassMutual and its policy owners by affording us the distinct opportunity to capitalise on the long-term success and value of MassMutual Asia,” said Roger Crandall, chairman, president and chief executive of US parent company MassMutual.
“At the same time, we will continue to participate in the growing and attractive Asian markets through our ongoing stake in the combined Yunfeng FG and MassMutual Asia business. The resulting company will be a full-service financial services firm, well-equipped to serve a wide range of customers, including high net worth individuals and an emerging universe of consumers with rising incomes.”
Opportunities in China
Eddie Ahmed, chairman, president and chief executive of MassMutual International, said: “Importantly, this transaction creates potential opportunities for MassMutual to partner with an innovative network of entrepreneurial Hong Kong- and China-based businesses, with an exciting range of prospective initiatives—from big data to asset management.
“As part of this transaction, MassMutual, Yunfeng FG and Ant Financial Services Group have agreed to enter into a strategic cooperation agreement to jointly explore future business opportunities. Additionally, we are dedicated to a seamless transition, ensuring smooth continuity for MassMutual Asia’s policy owners and customers.”