HONG KONG (Reuters) - Aviva Plc (L:AV) is exploring a sale of its Friends Provident International unit, which offers life assurance and investment products, in a deal that could raise between $500 million (398.26 million pounds) and $700 million, a source with direct knowledge of the matter said.
The British insurer has received preliminary interest from about half a dozen Chinese firms and European funds for the business, said the source, declining to be named as the process was not public.
An Aviva spokeswoman declined to comment. The news was earlier reported by the Wall Street Journal.
Friends Provident provides life assurance and investment products to global expatriate and affluent domestic customers in Hong Kong, Singapore, United Arab Emirates and other selected markets, according to information available on its website.
The company, domiciled in the Isle of Man, serves over 160,000 customers and employs more than 500 people worldwide.
Aviva, which offers life and general insurance such as motor and home cover, took control of Friends Provident as part of its $8.8 billion all-share takeover of rival Friends Life in 2015.
The insurer earlier this month generated a forecast-beating annual profit, boosted by growth in general insurance and asset management, and said more of its growing cash pile would be handed back to shareholders in 2017.
Chief Executive Mark Wilson said at the time that the Friends Provident business was under review.
According to the Wall Street Journal report, which cited people familiar with the situation, Chinese conglomerates Fosun Group (HK:0656) and HNA Group were among those evaluating the Aviva unit. Both companies declined to comment to the newspaper.
The Reuters source said Chinese firms and some European private equity funds would be the likely bidders for the asset, though some of the prospective Chinese buyers may be deterred by Beijing's capital outflow curbs aimed at propping up the yuan.
Chinese insurers have snapped up both domestic and overseas assets worth billions of dollars over the past two years to counter falling investment yields, a sharp drop in the yuan currency and sluggish stock markets at home.
The sale of Aviva's Friends Provident unit, if closed, will add to the growing list of insurance M&As in Asia.
Last week, First Origin International Ltd, a Hong Kong-based investment firm, agreed to buy Hong Kong Life Insurance for $914 million.
China's Thaihot Group <000732.SZ>, a relatively new entrant to Hong Kong financial circles, in 2016, agreed to buy Dah Sing Financial's (HK:0440) life insurance unit for $1.4 billion in Hong Kong's most expensive insurance M&A.