Jack Ma-backed Yunfeng in $1.7bn insurance acquisition

Private equity firm Yunfeng Financial Group is the main investor in a $1.7 billion acquisition of life insurer MassMutual International's Hong Kong unit.

Yunfeng Financial Group was co-founded by Jack MA, executive chairman of Alibaba Group.

Massachusetts Mutual Life Insurance Company’s (MassMutual) international insurance holding company—and Yunfeng Financial Group (Yunfeng FG, HKSE: 376) have entered into a transaction in which MassMutual International will sell Hong Kong-based MassMutual Asia (MassMutual Asia) to Yunfeng FG and several Asia-based investors, according to an Aug. 17 statement.

Under the terms of the transaction, MassMutual International will receive approximately $1.01 billion in cash and 800 million shares of Yunfeng FG with total value of approximately $668 million.

In turn, Yunfeng FG will hold a direct 60 percent interest in MassMutual Asia with the rest distributed among a number of strategic investors.

“This transaction represents a significant step forward for MassMutual and its policyowners by affording us the distinct opportunity to capitalize on the long-term success and value of MassMutual Asia,” said Roger Crandall, chairman, president and CEO of MassMutual. “At the same time, we will continue to participate in the growing and attractive Asian markets through our ongoing stake in the combined Yunfeng FG and MassMutual Asia business. The resulting company will be a full-service financial services firm, well-equipped to serve a wide range of customers, including high net worth individuals and an emerging universe of consumers with rising incomes.”

MassMutual Asia has two primary subsidiaries: MassMutual Insurance Consultants, which manages general insurance business, and MassMutual Trustees, which focuses on the Mandatory Provident Fund business, a compulsory pension plan for the retirement of residents in Hong Kong.

Eddie Ahmed, chairman, president and CEO of MassMutual International, said, “Importantly, this transaction creates potential opportunities for MassMutual to partner with an innovative network of entrepreneurial Hong Kong- and China-based businesses, with an exciting range of prospective initiatives—from big data to asset management.”

Ahmed continued, “As part of this transaction, MassMutual, Yunfeng FG and Ant Financial Services Group have agreed to enter into a strategic cooperation agreement to jointly explore future business opportunities. Additionally, we are dedicated to a seamless transition, ensuring smooth continuity for MassMutual Asia’s policyowners and customers.”

Yu Feng, chairman of Yunfeng FG, added: “The long term vision of Yunfeng FG is to leverage its fintech capabilities to develop a financial service ecosystem comprising information technology and online and offline platforms that offer a broad range of financial services and products, along with high quality expert advice. 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 Mr. Yu Feng, Chairman of Yunfeng FG.

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