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Jack Ma-Backed Yunfeng to Buy MassMutual Unit for $1.7 Billion

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Yunfeng Financial Group Ltd., the company backed by Alibaba billionaire Jack Ma, agreed to buy an Asian unit from Massachusetts Mutual Life Insurance Co. to add offerings such as death benefits and annuities.

The buyer will pay the equivalent of about $1.7 billion for Hong Kong-based MassMutual Asia Ltd., with about 60% of that sum in cash, and the rest in Yunfeng stock, the seller said Thursday in a statement.

(Related: MassMutual To Enter China)

Yunfeng Financial Group Ltd., the company backed by Alibaba billionaire Jack Ma, agreed to buy an Asian unit from Massachusetts Mutual Life Insurance Co. to add

Yunfeng, which is known for catering to wealthier individuals, has been broadening its reach, creating a robo-adviser to help manage the wealth of regular Chinese and Hong Kong investors. The business being acquired posted HK$6.88 billion last year, the buyer said in a separate statement. That’s the equivalent of $880 million in U.S. dollars.

MassMutual entered the Hong Kong market by acquiring Lippo Protective Life Insurance, a 6-year-old joint venture formed by Hongkong Chinese Bank and Lippo Protective Life Insurance Co., in 2000. The Journal of Commerce reported at the time that the deal came with a purchase price of at least $1.3 million.

“MassMutual Asia’s insurance products will broaden Yunfeng FG’s financial product offerings and significantly contribute to the building of its financial service ecosystem, given that insurance and annuity products are indispensable in overall financial planning,” Yunfeng Chairman David Yu said in the statement. “This transaction will also enable cross-referrals of existing customers of Yunfeng FG and MassMutual Asia, thereby facilitating a wider customer reach.”

Yunfeng shares have climbed about 13% this year. The Springfield, Massachusetts-based seller is owned by its policyholders.

‘Significant Step’

MassMutual, founded in 1851, has been reshaping its business mix under Chief Executive Officer Roger Crandall. The company has been seeking to expand in asset management and added a network of thousands of advisers in a deal last year with MetLife Inc.

“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,” Crandall said in the statement. “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.”

Ma is the founder of Alibaba Group Holding Ltd., which created China’s largest online bazaar.

JPMorgan Chase & Co. was the banker for the buyer, which got legal advice from Simpson Thacher & Bartlett, according to the seller’s statement. MassMutual used Citigroup Inc. and Skadden, Arps, Slate, Meagher & Flom.

MassMutual said its operation in Japan and a joint venture in China aren’t part of the transaction.

—With assistance from Selina Wang.

—-Read Life Insurance’s Global Boom on ThinkAdvisor.


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