HNA Group to buy 25% stake in Old Mutual US unit

BEIJING • Chinese conglomerate HNA Group has agreed to buy a 25 per cent stake in Old Mutual's US asset management unit for about US$446 million (S$621 million), adding to a US$30 billion spending spree since last year.

Old Mutual is selling down its stake in OM Asset Management to HNA Group in two tranches, a statement on Sunday from the London-based firm said.

The first - comprising 9.95 per cent at US$15.30 per share - will be completed within 30 days, with a second 15 per cent stake at US$15.75 taking place in the second half, the company said.

HNA has been investing in financial services as it seeks to broaden its portfolio beyond tourism and aviation. So far this year, it has bought a US$200 million stake in SkyBridge Capital, agreed to acquire assets from Australia & New Zealand Banking Group and also became one of the largest shareholders in Deutsche Bank. Old Mutual is also revamping, preparing to break up its wealth, US asset management business, emerging markets unit and lender Nedbank into standalone entities by the end of 2018.

The split is the culmination of a strategic review started by chief executive officer Bruce Hemphill last November in his bid to boost profitability and a share price that has trailed peers.

After the transactions with HNA, Old Mutual's holding of OM Asset Management will drop to about 26 per cent, from about 51 per cent now, it said.

Two directors from the Chinese company's HNA Capital US unit will join Old Mutual Asset Management's board as part of the deal, which was first reported by the Financial Times last Saturday.

OM Asset Management has about US$240 billion of assets under management.

HNA Group did not respond to requests for comment outside of Asian office hours.

The company controlled by billionaire Chen Feng last year bought stakes in hotel operator Hilton Worldwide Holdings and electronics distributor Ingram Micro. HNA Group is leading a deal to acquire Manhattan's 245 Park Avenue for US$2.21 billion, one of the highest prices paid for a New York skyscraper, two people with knowledge of the negotiations said last week.

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A version of this article appeared in the print edition of The Straits Times on March 28, 2017, with the headline 'HNA Group to buy 25% stake in Old Mutual US unit'. Print Edition | Subscribe