Manulife, HDFC Life among bidders for HSBC India insurance arm
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Canada's Manulife Financial Corp and the Indian affiliate of Standard Life plc are among the suitors to place first-round bids for HSBC plc's Indian life insurance business, a stake valued around $200 million, people familiar with the matter said.
HSBC plc, Europe's biggest bank, is selling its 26 percent stake in a life insurance joint venture with two Indian state-run banks, as it sheds noncore businesses globally.
The winner of the auction will get immediate access to about 5,500 branches of the two state-run banks. Bancassurance - an arrangement in which a bank and an insurance firm tie up so that the insurer can sell its products to the bank's customers - is emerging as a key tool to sell insurance products across Asia as the life insurance industry matures in the region.
HDFC Life, a joint venture between India's top mortgage lender HDFC Ltd and British insurer Standard Life; Birla Sun Life, a venture between Indian conglomerate Aditya Birla Group and Canada's Sun Life; and ICICI Prudential Life, a joint venture between India's No. 2 lender ICICI Bank and Britain's No. 1 insurer Prudential, are among the bidders to submit first-round bids last week, the people said.
HSBC's two Indian partners in the venture - Canara Bank Ltd and Oriental Bank of Commerce Ltd - could also pare their stakes, the people said, although no final decision has been made on this. That could push the deal value to $800 million, including a bank distribution agreement, they added.
"The biggest attraction for any Indian or foreign bidder in this joint venture would be the vast distribution network, which is absolutely essential in a country like India," said one of the sources directly involved in the process. "There are a very few good partnership opportunities available for foreign players in India, this venture is one of them."