U.S. life insurer Metlife Inc (NYSE:MET) has drawn three bidders for its Taiwan unit and is expected to seal a deal by as early as April, a source with direct knowledge of the situation said on Tuesday.
Taiwan's Chinatrust Financial Yuanta Financial and Mercuries Life Insurance, a unit of retailer Mercuries, have started due diligence, said the source, who asked for anonymity due to the sensitivity of the matter.
The planned sale would mark the latest exit by a foreign firm from Taiwan's saturated $52 billion insurance market after American International Group (NYSE:AIG) sealed a deal in January to sell its Nan Shan unit.
Chinatrust, Yuanta and Metlife declined to comment. Mercuries was not immediately available for comment.
It is Metlife's second attempt to sell the unit after an earlier $112 million deal was blocked by regulators, a fate that also befell AIG's first stab at selling Nan Shan. Authorities are sensitive to life insurers because of the huge numbers of policies held by individual Taiwanese.
AIG had also taken two attempts to sell its unit, and still faces tough regulatory scrutiny and a challenge from disgruntled unions. Metlife may fare better, however, the source said.
"The unit's financial books seem pretty healthy. And it does not have tough labor union issues like those of Nan Shan," said the source.
The labor unions of Nan Shan, whose 30,000 plus sales agents are the third-largest sales force in Taiwan, wants buyer group Ruen Chen Investment to pay up to some T$16 billion ($540 million) in pension money to agents.
That could cost the buyer another 25% on top of its purchase price, a request that neither it nor AIG are expected to accept.
Metlife's unit has only about 600 employees, with less than 1% market share.
Metlife's first attempt to sell its unit was blocked by Taiwan regulators in October, in part due to concern about the financial structure of the buyer, local firm Waterland Financial