ING to sell Asia investment management in separate deal: source

HONG KONG Thu Feb 9, 2012 3:34am EST

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HONG KONG (Reuters) - ING (ING.AS) has decided to split the sale of its Asian insurance business by auctioning its investment management business separately, in a move that allows a focused group of suitors to bid for the unit.

Separating the auction into two parts may also allow the Dutch bank and insurance group to earn more money from the process, by selling two divisions for a premium instead of one.

But a dual-process has its complications and challenges and requires a company and its executives to take the time and energy to run two auctions instead of one.

When ING announced the sale of its Asia life insurance group last month, it was unclear whether the company would separate the asset management business from the auction.

A source with direct knowledge of the matter on Thursday told Reuters that ING would in fact separate the auction into two parts. ING has hired Credit Suisse (CSGN.VX) as the sell-side adviser for the sale of the investment management business, said the source, who was not authorized to speak publicly about the process.

ING on Thursday reported a bigger-than-expected loss in its insurance operations because of exceptional charges as it prepares to sell or list the business.

ING and Credit Suisse declined to comment.

TWO-TRACK

ING's Asia-Pacific investment management business managed about $55 billion across, Japan, South Korea, Taiwan, China, Hong Kong, Malaysia, Thailand, at the end of the fourth quarter, 2011, according to a company filing made on Thursday.

It has already sold its investment management business in the Philippines and Australia.

In mature markets, investment management deals are often sold in a range of 2-4 percent of assets under management, which means ING could fetch about $2.2 billion for its investment management business. But the source was not aware of any price put on the business yet.

Deal values in the industry vary depending on the mix of debt and equity and also on the source of funds under management.

Reuters reported last month that ING hired Goldman Sachs (GS.N) and J.P. Morgan (JPM.N) to handle the sale of the Asia life insurance business, a business that analysts and bankers estimate is worth more than $6 billion if investment management is included.

(Reporting by Denny Thomas; Additional reporting by Clare Baldwin; Editing by Michael Flaherty and Ken Wills)

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