AIA agrees to buy Bank of East Asia's insurance business

HONG KONG, March 24 (Reuters) - Hong Kong-based insurer AIA Group has entered into an agreement to buy the wholly-owned life insurance unit of Bank of East Asia (BEA) and has signed a 15-year distribution partnership with the lender for a total of about $650 million.

The acquisition of BEA Life Ltd is expected to complete by the end of this year, subject to regulatory approvals, AIA said in a statement on Wednesday.

BEA, whose main markets are Hong Kong and mainland China, announced plans in September to sell BEA Life after pressure from activist investor Elliott Management for reforms to boost shareholder returns.

BEA said it was expected to book a profit of about HK$1 billion ($129 million) from the divestment of the insurance business, and a part of that would be paid to the bank’s shareholders.

$1 = 7.7688 Hong Kong dollars Reporting by Sumeet Chatterjee. Editing by Mark Potter