Taipei - Taiwan's Fubon Financial Holding, the island's second-largest financial group, Monday said it would buy the Taiwanese life insurance unit of Dutch banking giant ING Life Insurance.

"The acquisition will cost 600 million US dollars and we all believe it is a great deal for both Fubon Financial and ING in terms of business strategy and financial decision," Fubon president Victor Kung said.

He said ING is affected by the global financial turmoil and needs to adjust its asset allocation. "That is why we got this chance to buy a great company at a very reasonable price," he noted.

The deal would allow Fubon to become Taiwan's second-largest life insurance firm in terms of premiums, adding 2.2 million ING clients to its existing 6.5 million clients, market analysts said.

Fubon's life insurance assets would increase to 974 billion Taiwan dollars (30 billion US dollars) from 361 billion Taiwan dollars (11.2 billion US) after the acquisition.

Fubon would issue new shares equivalent to a 5-per-cent stake in the company to fund part of the acquisition. It committed to keep ING Taiwan policyholders' rights and interests unchanged, a company statement said.

The deal is expected to close in the first quarter of 2009 following approval from Fubon shareholders and regulators.

In a statement, ING said it would keep 5 per cent of shares in Fubon and maintain its presence in Taiwan.

"We remain committed to the Taiwanese market through our fund management, real estate and wholesale banking activities," it said.

The deal came shortly after the Dutch government announced at the weekend it would inject a 10 billion euros (13.5 billion US dollars) into ING which, like US insurance giant AIG and other big global banks, has to sell off its non-core overseas' units to improve its financial performance. (dpa)