AIA sizes up bid for $6 billion ING Asia insurance

HONG KONG (Reuters) - AIA Group Ltd <1299.HK>, Asia's third-largest insurer, is exploring making an offer for Dutch ING's roughly $6 billion Asian insurance operations, sources said, with the planned sale of the business expected to draw heavy interest from rivals.

AIA, about one third owned by American International Group Inc , has invited four banks to pitch for advisory roles for a potential offer, two sources familiar with the process told Reuters. The sources declined to be identified as they were not authorized to speak to the media.

An AIA spokeswoman declined comment.

Last week, ING scrapped plans to list its combined Asian and European insurance and investment management businesses, saying it would consider other options as it had received strong interest for its Asian operations.

ING has hired Goldman Sachs and J.P. Morgan to advise on the sale, sources told Reuters.

The prospective sale by the Dutch bancassurer comes as European banks look to offload assets and repair balance sheets battered by the sovereign debt crisis.

Japan's Sumitomo Mitsui Financial Group (SMFG) <8316.T> and Sumitomo Corp <8053.T> said earlier they would buy Royal Bank of Scotland's aircraft leasing business in a deal worth $7.3 billion.

AIA, led by former Prudential Plc CEO Mark Tucker, is a surprise leader in chasing the ING business, some analysts said, as most of AIA's business is generated from fast growing Asian markets, while more than three quarters of ING's new sales are in the maturer South Korean and Japanese markets.

As in any auction, AIA may decided to pursue or back away from the process, the sources said.

ING's sale process is expected to attract interest from global insurers, too. AIA, which was the crown jewel in bailed-out insurer AIG's global business, was floated on the Hong Kong stock exchange in 2010 through a $20.5 billion IPO.

Analysts estimate AIA has about $3 billion in excess capital over regulatory requirements, and would have no problem raising funds if it did go ahead with a complete takeover of ING's Asian insurance business.

AIA shares gained as much as 1.9 percent to their highest since January 6, while the benchmark Hang Seng share index <.HSI> was up 2.3 percent.

(Reporting by Denny Thomas; Editing by Jonathan Hopfner and Ian Geoghegan)

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