Yunfeng Financial Group said it would be the main investor in a US$1.7 billion (S$2.3 billion) acquisition of insurer MassMutual International's Hong Kong unit - a deal that sent shares in the Jack Ma-backed finance firm soaring by as much as 30 per cent.
The cash and stock deal will add insurance products to Yunfeng's existing fintech-focused financial services, in what it called a milestone in its ambitions to become a financial conglomerate.
Yunfeng will own 60 per cent of MassMutual Asia. The rest will be owned by other investors such as Ant Financial Services, an affiliate of Mr Ma's Alibaba, as well as sovereign wealth fund GIC and Chinese Internet and telecoms firm Sina Corp.
The deal will see MassMutual, Yunfeng and Ant enter into a strategic cooperation agreement to explore future business opportunities. Ant has also been expanding rapidly, delving into a range of businesses from wealth management to micro lending.
GIC said in a statement that the prospect of collaboration between the three firms could create "significant value" and that it saw consistent growth for MassMutual Asia in Hong Kong's life insurance industry.
Yunfeng will pay the US insurer US$1 billion in cash and 800 million shares valued at HK$6.50 apiece. MassMutual will have a 24.8 per cent stake in Yunfeng's enlarged share capital.
Shares in Yunfeng ended 5.4 per cent higher, giving it a market value of HK$16.1 billion. Earlier, it had surged by as much as 30 per cent.
MassMutual Asia has two main units - one manages its general insurance business while the other focuses on the Mandatory Provident Fund business, a compulsory pension plan for the retirement of residents in Hong Kong.
MassMutual International said its business in Japan and a joint venture in China were not part of the transaction, and that Yunfeng had indicated it will move forward with MassMutual Asia's employees and management team intact.
MassMutual Asia employs some 3,000 professional consultants, according to its website.
There were several mergers and acquisitions in the Asian insurance sector recently. Last month, British insurer Aviva agreed to sell its Asia and Middle East-focused Friends Provident International business for £340 million (S$598 million) as part of a plan to leave less profitable markets.
Reorient Financial Markets, a wholly owned unit of Yunfeng, and JPMorgan acted as Yunfeng's financial advisers on the deal, while Citigroup advised MassMutual International.