Manulife, HDFC Life in race for HSBC’s stake in life insurance JV

Canada's Manulife Financial Corp and the Indian affiliate of Standard Life plc are among the suitors to place first-round bids for HSBC plc's Indian life insurance business, a stake valued at about $200 million, people familiar with the matter told Reuters.

HSBC plc, Europe's biggest bank, is selling its 26 per cent stake in a life insurance joint venture with two Indian state-run banks, as it sheds noncore businesses globally.

The winner of the auction will get immediate access to about 5,500 branches of the two state-run banks. Bancassurance is emerging as a key tool to sell insurance products across Asia as the life insurance industry matures in the region.

HDFC Life, a joint venture between India's top mortgage lender HDFC Ltd and British insurer Standard Life; Birla Sun Life, a venture between Indian conglomerate Aditya Birla Group and Canada's Sun Life; and ICICI Prudential Life, a joint venture between India's No. 2 lender ICICI Bank and Britain's No. 1 insurer Prudential, are among the bidders to submit first round bids last week, the people said.

HSBC's two Indian partners in the venture - Canara Bank Ltd and Oriental Bank of Commerce Ltd - could also pare their stakes, the people said, although no final decision has been made on this. That could push the deal value to $800 million, including a bank distribution agreement, they added.

"The biggest attraction for any Indian or foreign bidder in this joint venture would be the vast distribution network, which is absolutely essential in a country like India," said one of the sources directly involved in the process. "There are a very few good partnership opportunities available for foreign players in India, this venture is one of them."

HSBC, HDFC Life, ICICI Prudential, and Manulife declined to comment. Aditya Birla Nuvo, majority owner of Birla Sun Life, also declined to comment.

The sources declined to be identified because the sale process is confidential.

Leave Your Comment(s)