Manulife Acquires 49% Stake in China-based ABM AMRO TEDA

 

Wednesday, Nov 25,2009, 11:33:07 AM   Click:

Manulife Financial Corp. [66866] is expanding into China's asset management business by acquiring a stake in China-based ABM EMRO TEDA Fund Management Co. Ltd. The company hopes to reach the retail and institutional asset management markets across China.

Manulife Asset Management (Hong Kong) Ltd., a subsidiary of Manulife International Holdings Ltd. [51766], has agreed to purchase Fortis Bank's 49% stake ownership in AMB EMRO TEDA for 105 million euro (US$156 million).

This purchase gives the financial group a "fast track" entry into China's asset management sector, which is expected to become one of the largest markets in the world in the coming decade, said Manulife in a statement.

The Canadian financial group said the acquisition is expected to be accretive to earnings in the first year and to have a negligible impact on capital levels.

Established in 2002, AMB EMRO TEDA is 51% owned by Northern International Trust & Investment Co. Ltd., part of Tianjin TEDA Investment Holding Co. owned by Tianjin City in China. The Beijing-based joint venture has assets under management of US$3.8 billion.

The newly acquired entity will change its name to Manulife TEDA Fund Management Co. Ltd. With the completion of this deal, Manulife Financial will have asset management firms in nine of 10 operating territories across Asia. Manulife said the company will be strategically better positioned to serve both wealth management and insurance services in Asia.

Manulife Financial manages more than US$100 billion in assets for institutional and retail clients globally including US$13.5 billion of assets under management in Asia.

The new joint venture will extend "our global asset management capabilities into China" with the strengthening of Asian investment business, said J-F Courville, president and chief executive officer of global investment management at Manulife Financial.

"With this transaction, we are moving towards becoming one of the leading pan-Asian wealth managers in the financial services industry," said Courville. In China, the asset management venture plans are to seek regulatory approval for expanding its lines of business.

"We are taking advantage of a rare opportunity to propel our business forward and accelerate its growth versus a start-up development," said Robert Cook, president and chief executive officer of Manulife International Holdings.

"When coupled with our expensive experience in China through our joint venture Manulife-Sinochem, we are extremely well-positioned for success," added Cook.

In China, Manulife-Sinochem Life Insurance Co. Ltd. [78474] was a joint venture formed in 1996 between Manulife (International) Ltd. [78477] and China Foreign Economy and Trade Trust Co., a member of state-owned Sinochem Group with businesses in energy, chemicals, agriculture, finance and real estate.

Operating in 38 cities in 11 provinces, Manulife-Sinochem has about 11,000 agents serving more than 490,000 customers in China. The life insurer reported a premium income of 1.28 billion yuan (US$187 million) in the past 10 months ended October 2009, up from 1.09 billion yuan a year ago, according to China Insurance Regulatory Commission.