CTBC Financial Holding Co (中信金控) yesterday announced that it has bought Canadian firm Manulife International Ltd’s Taiwanese unit as part of efforts to develop diversified sources of revenue and increase its earning potential via mergers and acquisitions.
The acquisition of Manulife Insurance Co (宏利人壽) for NT$724 million (US$24.04 million) came just a few days after media reported that CTBC had agreed to buy Tokyo Star Bank Ltd for ￥52 billion (US$527 million) to tap the market of the world’s third-largest economy. However, the company dismissed the reports as rumors.
CTBC, previously known as Chinatrust before it renamed itself in late June, said in a filing to the Taiwan Stock Exchange that its board had agreed to buy Manulife Insurance and that the firm expects its life insurance unit, CTBC Life Insurance Co (中信人壽), to expand the scale of its business and improve operational efficiency after the new unit is integrated.
“Under the agreement, CTBC Life will assume virtually all of the life insurance-related obligations of Manulife’s Taiwanese branch and will offer jobs to all of its existing employees and agents,” the company said.
The interests of Manulife Insurance’s 1,100 employees and 96,000 policy holders, as well as the rights of the 177,000 insurance policies the company owns, will remain protected, CTBC said.
The company said it expects transaction, which is subject to typical closing conditions including the receipt of regulatory approvals, to be finalized before the end of the year.
As of the end of June, CTBC Life reported total assets of NT$164.9 billion, with 387,000 policy holders and NT$16 billion in first-year premiums generated in the first half, accounting for 3.16 percent of the local market.
Meanwhile, Manulife Insurance held total assets of NT$40.1 billion as of June 30, with NT$2.6 billion in first-year premiums, or a market share of 0.61 percent.
When the transaction is completed, it is expected to increase CTBC Life’s market share to 3.67 percent in terms of first-year premiums, with combined assets of more than NT$200 billion, local cable TV network UBN quoted CTBC Life spokesman Vanney Cho (卓長興) as saying yesterday.
The purchase of Manulife Insurance is CTBC’s second foreign insurance company acquisition in three years, as the local operational environment becomes increasingly difficult for foreign players.
In March 2011, the company announced plans to buy US-based MetLife Inc’s local unit, MetLife Taiwan Life Insurance Co (大都會人壽), for US$180 million. The bid was approved by the Fair Trade Commission and the Financial Supervisory Commission later that year.
Manulife International Ltd’s parent company, Manulife Financial Corp, said in a statement yesterday that it remains committed to its asset management operations in Taiwan, Manulife Asset Management Taiwan Co (宏利投信).