US-based Principal Financial Group has agreed to acquire AXA’s Mandatory Provident Fund (MPF) and Occupational Retirement Schemes Ordinance (ORSO) pension business in Hong Kong, for around $335m.


Both the firms will also sign an exclusive 15-year distribution agreement, under which Principal will provide pension products through AXA’s agency network in Hong Kong.

The Principal Financial Group chairman, president and CEO Larry Zimpleman said: "This acquisition continues our effort to target strategic acquisitions that strengthen our competitive position in the most attractive emerging retirement and long-term savings markets in the world.

"This marks our ninth strategic transaction since the financial crisis and demonstrates how our diversified, fee-based business model generates financial strength and opportunities to grow our business."

According to Principal Financial, the deal is said to double its assets of pension business under management in Hong Kong, which is around $6bn.

Subject to regulatory approvals, the transaction is expected to be completed in the third quarter of 2015.

The Principal International president Luis Valdes said: "The AXA pension business fits naturally with our international strategy, providing critical scale and expanding our growing base in key markets like Hong Kong."

The Principal Financial Group provides financial products and services, including retirement, asset management and insurance to businesses, individuals and institutional clients.

Image: Principal Financial Group in Hong Kong. Photo: courtesy of DaviSements.