Hong Kong-based banking major Bank of East Asia (BEA) announced the sale of its life insurance unit to insurance giant AIA for HKD 5.07bn ($653mn). As per SCMP, the transaction is the result of a strategic review called for by activist shareholder Elliott Management, run by Paul Singer, regarding the direction of BEA, Hong Kong’s largest family-owned bank. As part of the deal, BEA will become the exclusive distributor of AIA’s life insurance and long-term savings products to its retail banking clients in Hong Kong, Macau and 9 cities in the Greater Bay Area (GBA) in mainland China for 15 years. AIA’s regional chief executive officer Jacky Chan said, “Our complementary and broad capabilities across the GBA enable AIA and BEA to build a unique partnership and harness the growth potential as the region develops.” The bank, founded in 1918 and controlled by the Li family, will book a profit of HKD 1bn ($129mn) and plans to pay part of the proceeds from the sale to shareholders, depending on “prevailing market conditions and regulatory expectations”.
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