ING has set a deadline of the third week of May to submit bids for its Asian life insurance business, sources said on Monday, as the Dutch bancassurer kickstarted its Asian divestments to repay part of the bail-out money received during 2008 financial crisis.
ING is selling the insurance and investment management businesses separately in deals that could fetch in excess of $6.5 billion. It has sent out information booklets for the sale to some potential suitors, while others are likely to get the documents later this week.
Information memorandums (IMs) contain financial details of the businesses being sold which will help suitors arrive at their bid values.
By sending out IMs, the bailed-out Dutch bank and insurer has set in motion an auction that has generated interest from global insurers keen to get a foot-hold in Asia's rapidly growing insurance industry.
"The starting gun has kind of gone off," another source told Reuters.
At least a dozen global and Asian insurers, including Metlife, Prudential Financial, Manulife Financial Corp and AIA Group Ltd, have expressed interest in participating in the auction.
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ING must spin off its insurance and investment management operations by the end of 2013 in return for European Commission approval for 10 billion euros ($13.26 billion) of Dutch state aid received in 2008.
An ING spokeswoman in Hong Kong declined to comment. Sources declined to be identified because the sale process is confidential.
The investment management business is being sold in a separate auction and the IMs for that sale are expected to go out this week, the sources added. Some analysts estimate the investment management business to fetch $500 million to $600 million.
Suitors who signed and returned the confidentiality agreements to ING started receiving the IMs on Friday, but some are still negotiating the terms of the confidentiality agreements and are likely to receive the documents later this week, the sources said.
While ING's preference is to sell the entire Asian life insurance operations in seven countries in one deal, it will allow suitors the option to bid for specific operations.
The South Korea business is valued at about $2.5 billion and Malaysia about $1 billion, one of the sources said.
South Korea and Japan account for about two-thirds of ING's Asian business but Japan may prove to be a stumbling block in the auction due to the 18 billion euros worth high-guarantee variable annuity policies the Japan operation has on the books.