The Canadian Press

Manulife Financial Corp. (TSX:MFC) is expanding its Chinese operations with a deal to buy Fortis Bank’s 49% interest in China-based ABN AMRO TEDA Fund Management Co. for 105 million euros, or US$156 million.

After the transaction closes in the first quarter of 2010 subject to regulatory approval, the new joint venture will be called Manulife TEDA Fund Management Co. Ltd., Canada’s largest insurance company said after markets closed Monday.

The joint venture company will provide traditional retail and institutional asset management across the Chinese market.

Manulife already has a big insurance joint venture in China and is one of several Canadian financial companies, including some of the big banks such as Bank of Montreal (TSX:BMO) and Royal Bank of Canada (TSX:RY), as well as Sun Life Financial (TSX:SLF) to have key operations in the rapidly growing Asian country.

“While Manulife TEDA Fund Management Co. Ltd. plans to maintain and grow its existing platform of high quality asset management products, over time it also plans to seek regulatory approval for expanding its lines of business as and when permitted by CSRC (China Securities Regulatory Commission) and other relevant bodies,” Manulife added in a news release after stock markets closed.

The company said the acquisition is expected to boost Manulife Financial’s earnings in the first year and have a negligible impact on capital levels.

“Our new partnership with TEDA provides a rare strategic opportunity to make a fast-track entry into China’s large and high growth market for individual and institutional wealth management services,” stated Manulife president and CEO Donald Guloien.

“This accelerates our expansion in China’s huge growth market by several years,” Guloien added. “We are impressed by the quality of this asset management operation with its strong management team and competitive culture.”

Manulife noted that the asset management industry in China is expected to become one of the largest in the world in the coming decade. Current industry assets under management of US$338 billion are forecast to grow significantly and exceed US$1 trillion by 2014.

Jean-Francois Courville, president and CEO of MFC Global Investment Management, the asset management division of Manulife Financial, said the company was “excited about the opportunity to extend the reach of our global asset management business into China.”

“Our new joint venture should lead to opportunities to offer the asset management capabilities within Manulife TEDA Fund Management Company Ltd. to our global clients, to offer our global asset management capabilities into China, and to significantly strengthen our Asian investment management capabilities.”

With the completion of this deal, Manulife Financial will have asset management companies in nine of 10 of its operating territories across its Asia Division and will be strategically better positioned to serve both the wealth management and protection needs of consumers in Asia.

MFC Global Investment Management currently manages over US$100 billion in assets for institutional and retail clients worldwide, including US$13.5 billion under management for clients across Asia.

ABN AMRO TEDA Fund Management Co. Ltd, established in 2002, currently has assets under management of US$3.8 billion and is 51 per cent owned by Northern International Trust, part of Tianjin TEDA Investment Holding Co., Ltd., owned by Tianjin City and managing total assets of US$18.2 billion.

Operating in 38 cities in 11 provinces, Manulife-Sinochem Ltd. currently has more than 10,000 agents serving over 490,000 customers across China. MSL was established in 1996 and was the first joint venture life insurance company in China.

Manulife Financial, Canada’s largest insurer, serves millions of customers in 22 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and primarily through John Hancock in the United States, it has some US$407 billion in assets under management.

In trading on the TSX, Manulife shares fell 18¢ to close at $18.78 on a volume of nearly 11.3 million shares.