Jack Ma leads $1.7bn buyout of MassMutual Life Insurance’s HK unit

Big 5

Jack Ma, Asia’s richest man, is extending the global reach of his financial services empire, by making a $1.68 billion cash-and-stock buyout of Massachusetts Mutual Life Insurance’s Hong Kong unit.

Yunfeng Financial Group, a Hong Kong-listed financial services company backed by Ma, will pay $1.01bn in cash to MassMutual for the business, the US insurance group said in a statement. MassMutual will also take a 24.8 per cent stake, valued at $668 million, in Yunfeng.

The announcement sent Yunfeng’s Hong Kong shares soaring at least 30 per cent in early trading on Friday. Ma is the billionaire chairman of Alibaba, China’s largest ecommerce group and, according to Bloomberg, Asia’s richest man.

The purchase of the insurance business is the latest in a series of overseas investments into financial services by companies connected to him. Many of the deals involve Ant Financial Services, an affiliate of Alibaba in which Ma is invested.

Ant is investing alongside Yunfeng in the MassMutual deal and will buy about 5 per cent of MassMutual Asia. Ant, operator of one of the world’s largest mobile payments platforms called Alipay, is also seeking to buy MoneyGram International, a US payments company, for about $1.2 billion.

That deal, launched in January, is Ant’s first push into US financial services but has run into national security concerns and is under review by the US foreign investments watchdog.

In February, Ant said it would invest $200 million in the mobile finance subsidiary of South Korean instant-messaging group Kakao. It has also invested in an Indian computer and electronics company, according to data from Dealogic.

“These deals are the thin edge of the wedge for them [Jack Ma-connected companies] to get into new markets,” said Duncan Clark, chairman of Beijing-based investment adviser BDA and author of a book on Alibaba and Ma.

“They’re not trying to take on Amazon in the US but maybe they [will] push into payments there.” Yunfeng, which goes into the MassMutual Asia deal with several investors, will hold 60 per cent of company. The other investors include an affiliate of the Singapore sovereign wealth fund GIC, and Chinese internet and telecoms group Sina Corp.

Yunfeng runs a wealth management and securities broking business and says the buyout will add to the range of services it can offer.

“This transaction is a milestone step of Yunfeng FG becoming a financial conglomerate, integrating its existing fintech-focused financial services with traditional insurance business,” said Yunfeng chairman Yu Feng in a statement.

A number of mainland China-based groups have moved into Hong Kong via buyouts of insurance businesses in recent years. Fujian Thai Hot Investments, a Chinese property group, paid $1.4 billion for Dah Sing Financial Holdings’ insurance business earlier this year. In 2015, Beijing-based JD Capital bought the Hong Kong unit of Belgian insurance company Ageas for $1.4 billion.

Source: The Financial Times