Chinatrust Financial Holding Co (中信金控), the nation’s third largest financial services provider by assets, has inked an agreement with MetLife Inc to acquire its local unit for US$180 million in a bid to expand into the life insurance market in Taiwan and China, executives from the two firms said yesterday.
The acquisition, which still needs approval from the Financial Supervisory Commission, will be fully financed by Chinatrust Financial, company president Daniel Wu (吳一揆) told an evening news conference.
“The group wanted to purchase a life insurance unit so it could tap into the local market and use it as springboard into the Chinese market,” Wu said.
Chinatrust Commercial Bank (中信銀), the conglomerate’s banking arm, tops other peers in terms of bancassurance business because of a strong distribution channel within 146 branches nationwide.
Chinatrust Financial pledged to retain all of MetLife Taiwan Insurance Co’s (大都會人壽) 624 employees and maintain their current benefits and compensation for at least two years, Wu said, adding that the company would also safeguard the rights of the 307,000 existing policyholders.
MetLife Taiwan, created in 1989, had NT$92.4 billion (US$3.12 billion) in assets and a net worth of NT$9.8 billion as of last month, company president and chief executive Jack Mong (孟子文) told reporters.
MetLife regional managing director Peter Smyth said the US firm decided to exit Taiwan because of limited growth prospects for its local unit.
“The scope of business prospects for MetLife Taiwan is limited due to the absence of its own distribution channel,” Smyth said. “That is not a concern with a domestic financial group, however.”
This is the New York-based insurer’s second attempt to divest its Taiwanese unit after the financial regulator rejected in November a purchase plan by Waterland Financial Holding Co (國票金控) on concern about a lack of funding and management competence and boardroom harmony.
MetLife, the world’s largest life insurer, has no intention of re--entering Taiwan in the foreseeable future although nothing is impossible in business, Smyth said.
He dismissed links between the planned sale and new international accounting rules that raise capital requirements for insurers. Smyth also declined to comment if Chinatrust Financial was the highest bidder, saying the company had to factor in regulatory approval and other issues.
Taishin Financial Holdings Co (台新金控) and MassMutual Mercuries Life Insurance Co (三商美邦人壽保險) said in recent stock exchange filings they were also interested in acquiring MetLife Taiwan.
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