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Money Management

Jack Ma-backed Yunfeng to buy MassMutual Asia in deal giving MassMutual 25% stake in Yunfeng

Billionaire Jack Ma, chairman of Alibaba Group Holding Ltd.

Sovereign wealth fund GIC to acquire minority stake in Yunfeng as part of the deal

Yunfeng Financial Group, a Hong Kong-listed brokerage firm backed by Alibaba founder Jack Ma, will lead a group of Asian investors in acquiring Massachusetts Mutual Life Insurance Co.'s Hong Kong-based MassMutual Asia Ltd., the two companies announced Friday.

MassMutual will receive $1.7 billion for its Asian insurance operations, with $1.01 billion in cash and roughly $668 million in Yunfeng FG stock. The deal will leave the Springfield, Mass.-based insurer holding a roughly 25% stake in Yunfeng FG.

Yunfeng, in turn, will hold a 60% interest in MassMutual Asia, with roughly 20% of that consideration in the form of cash and the rest in stock.

A group of strategic investors will hold the remaining 40% of MassMutual Asia, with Meyu International Co. owning 9.8%; Singapore sovereign wealth fund GIC with 7.5%; Ant Financial Services Group, Sina Corp. and Sheen Light Development with 5% each; Harvest Billion International with 4.9%; and Giant Investment (HK) with 2.8%.

In a joint Yunfeng-MassMutual news release Friday, Roger Crandall, the chairman, president and CEO of MassMutual, said his firm "will continue to participate in the growing and attractive Asian markets through our ongoing stake in the combined Yunfeng FG and MassMutual Asia Business."

A MassMutual spokesman said the transaction will combine MassMutual's expertise in insurance and retirement planning with Yunfeng FG's expertise in brokerage, wealth management and employee stock ownership plan administrative services, among other synergies.

Eddie Ahmed, chairman, president and CEO of MassMutual International, in the same news release, said the tie-up will position MassMutual to "partner with an innovative network of entrepreneurial Hong Kong- and China-based businesses, with an exciting range of prospective initiatives — from big data to asset management."

As part of the transaction, MassMutual, Yunfeng FG and Ant Financial Services Group, the latest incarnation of the Alibaba Group's Alipay financial services and payments network, "have agreed to enter into a strategic cooperation agreement to jointly explore future business opportunities," Mr. Ahmed added.

Asked about potential areas of cooperation, a MassMutual spokesman said with the complex nature of the transaction making it likely that the deal could close about the end of 2018, it's too early at this point to go into detail.

Yunfeng FG's stock opened Friday up more than 30% on the back of the MassMutual news, but gave up the bulk of those gains by the close, ending up 5.4% at HK$6.62 (85 cents).