FWD Mulls Options for $10 Billion Insurer After IPO Delay, Sources Say

FWD Group Holdings Ltd., the Asian insurer controlled by billionaire Richard Li, is considering options including a potential stake sale after delaying a planned initial public offering, according to people familiar with the matter.

The company could seek a valuation of more than $10 billion in any deal, the people said, asking not to be identified because the information is private. Global insurers including Toronto-based Sun Life Financial Inc. have approached FWD to express interest in a tie up, the people said.

While talks with Sun Life hit a snag over price, other insurers eyeing a bigger presence in southeast Asia and Hong Kong have also expressed preliminary interest in a potential deal, the people said. A fresh strategic investment could provide an exit to some long-standing FWD shareholders as an IPO is unlikely to happen anytime soon due to market volatility, the people said.

Should a deal go ahead, FWD could use part of the proceeds to reduce debt, while it remains focused on boosting sustainable profitability and growth, the people said. Considerations are ongoing and may not lead to any transaction, they said.

A representative for FWD declined to comment. A spokeswoman for Sun Life said the company’s practice is not to comment on M&A speculation, adding that the company is always looking for opportunities to add scale and capabilities that will help meet its medium-term financial objectives, as well as support its four strategic pillars in asset management, Canada, the US and Asia.

Last year, FWD considered a fresh pre-IPO private funding round amid a delay of its planned Hong Kong listing, Bloomberg News reported in May. FWD had filed for a Hong Kong IPO three times, most recently in March 2023. Before that, the firm abandoned a New York listing plan that could have raised as much as $3 billion in 2021, people familiar with the matter have said.

FWD was started in 2013 by Li, a Hong Kong tycoon who also runs PCCW Ltd., one of the city’s major telecom companies. The insurer has since expanded across Asia both organically and via acquisitions. Li’s investment vehicle Pacific Century Group is the company’s majority shareholder. Minority investors include Swiss Re AG, Apollo Global Management Inc. and Canada Pension Plan Investment Board.

Photograph: A digital billboard advertising FWD Group Holdings Ltd. atop a building in Hong Kong, China, on Saturday, Oct. 15, 2022. Photo credit: Lam Yik/Bloomberg