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MassMutual to divest Asian business to Yunfeng-led consortium for $1.7bn

MassMutual International has agreed to divest MassMutual Asia, its Asian business based in Hong Kong, to Yunfeng FG and a group of Asia-based investors for nearly $1.7bn.

The acquisition will be carried out in a cash-cum-stock transaction with MassMutual International to receive HKD7.9bn ($1.01bn) in cash.

Apart from that the mutual life insurance company based in Springfield, Massachusetts will acquire 800 million shares in Yunfeng FG, representing a stake of 24.8% stake valued at $688m.

Yunfeng FG is an Asia-focused investment and financing platform backed by Jack Ma, the founder of Chinese e-commerce giant Alibaba.

MassMutual chairman, president and CEO Roger Crandall said: “This transaction represents a significant step forward for MassMutual and its policyowners by affording us the distinct opportunity to capitalize on the long term success and value of MassMutual Asia.

"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.”

Post acquisition, Yunfeng FG will have a 60% stake in MassMutual Asia. The remainder stake will be held by other investors Meyu International (9.8%), City-Scape (7.5%), Ant Financial Services Group, Sheen Light Development and SINA which will all hold 5% each while Harvest Billion International and Giant Investment will hold 4.9% and 2.8% stakes respectively.

Yunfeng FG chairman Yu Feng said: “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.

“MassMutual Asia's strong distribution capability, featured by its well-trained tied-agent force, will enable the enlarged group to combine with Yunfeng FG's existing team of software engineers to enhance customer experience and further strengthen its online to offline (O2O) capabilities.”

MassMutual Asia comprises two main subsidiaries in MassMutual Insurance Consultants which handles general insurance and MassMutual Trustees which deals with mandatory provident fund.

The transaction will not include MassMutual Asia’s Macau operations and MassMutual International’s Japanese business and a joint venture in China.

As part of the deal, MassMutual will work closely with Yunfeng FG and Ant Financial Services Group to assess future business opportunities.

Image: MassMutual to sell its Asian business for $1.7bn. Photo: courtesy of adamr/