Yunfeng Financial Group Ltd, the company backed by Alibaba billionaire Jack Ma, agreed to buy an Asian unit from Massachusetts Mutual Life Insurance Co to add offerings such as death benefits and annuities.
The buyer will pay HK$13 billion (US$1.7 billion) for Hong Kong-based MassMutual Asia Ltd, with about 60 per cent of that sum in cash, and the rest in Yunfeng stock, the seller said on Thursday in a statement.
Yunfeng, which is known for catering to wealthier individuals, has been broadening its reach, creating a robo-adviser to help manage the wealth of regular Chinese and Hong Kong investors. The business being acquired posted premium income of HK$6.88 billion last year, the buyer said in a separate statement.
“MassMutual Asia’s insurance products will broaden Yunfeng FG’s financial product offerings and significantly contribute to the building of its financial service ecosystem, given that insurance and annuity products are indispensable in overall financial planning,” Yunfeng Chairman David Yu said in the statement. “This transaction will also enable cross-referrals of existing customers of Yunfeng FG and MassMutual Asia, thereby facilitating a wider customer reach.”
MassMutual, founded in 1851, has been reshaping its business mix under Chief Executive Officer Roger Crandall. The company has been seeking to expand in asset management and added a network of thousands of advisers in a deal last year with MetLife.
“This transaction represents a significant step forward for MassMutual and its policyowners by affording us the distinct opportunity to capitalise on the long term success and value of MassMutual Asia,” Crandall said. “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.”
Ma is the founder of Alibaba Group Holding Ltd, which created China’s largest online bazaar. Alibaba is the publisher of The South China Morning Post.
MassMutual said its operation in Japan and a joint venture in China are not part of the transaction.