Hong Kong-based insurer FWD Group has entered into exclusive negotiations to acquire Siam Commercial Bank’s (SCB) life insurance business, sources said.

The deal, if successful, is valued at around US$3 billion and could be the largest insurance M&A deal in the ASEAN region. SCB is the third-largest bank in Thailand.

Sources have told Reuters that a decision about the deal could be available by late May. However, if the deal is not worked out, then SCB will move on to other bidders.

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Southeast Asia is a popular expansion venue for insurers due to the region’s low insurance penetration, younger population, and emerging economies.  If FWD succeeds in acquiring SCB Life Assurance, then it will greatly expand its existing wholly owned operation in Thailand, which was worth US$2.2 billion at the end of 2015.

AIA Group, Manulife Financial Corp, and Prudential Plc were all linked as potential buyers for SCB Life Assurance, but these negotiations fell through.

FWD is owned by Hong Kong business tycoon Richard Li, youngest son of Li Ka-shing, Asia’s richest man. It was started when Li bought NG Group NV’s Hong Kong, Macau, and Thailand insurance businesses for US$2.14 billion in cash.

The group expanded into other emerging markets in the region, including the Philippines, Indonesia, and Vietnam. It now has over 1.1 million customers and a network of over 11,000 financial advisers.


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