CORRECTED-UPDATE 1-ING's Asia life insurance sale shifts into top gear - Reuters

* First round bids due on Friday

* Short listed bidders could be known before end-May

* Sale could set record for Asia insurance M&A

* A dozen suitors received information memorandums

* Deal could yield about $100 mln in fees for bankers, lawyers

By Denny Thomas

HONG KONG, May 18 (Reuters) - Global insurers Manulife Financial Corp, Metlife and Prudential Financial Corp are among suitors expected to place first-round bids on Friday to buy ING Groep's Asia life insurance unit in a deal worth about $6.5 billion to $7 billion, sources familiar with the matter said.

A sale topping $7 billion could rank as Asia's top insurance M&A deal and would help the bailed-out bancassurer repay the 3 billion euros ($3.81 billion) of state aid plus the 50 percent premium it still owes the Dutch government..

ING has turned into a divestment machine since receiving the state aid and has sold 15.2 billion euros worth of assets across the world. The Asian sales would figure among the top two deals from ING's stable..

As part of the Asian divestment, ING received about 10 initial bids for its Asian asset management business this week. The asset management business, expected to fetch between $500 million and $600 million, is being sold separately. .

ING sent out a dozen information memorandums for its insurance business, which spans southeast Asia and includes operations in Japan and South Korea. A winning bid by a larger insurer could introduce more competition into Asia's rapidly growing life insurance market, currently dominated by AIA Group Ltd and British insurer Prudential plc.

AIA, part-owned by AIG, is among the Asian bidders expected to participate in the auction. Other suitors include South Korea's KB Financial Group, Korea Life Insurance Co, Canada's Sun Life Financial Inc , Switzerland's Zurich Insurance Group and Italy's Generali.

U.S. private equity fund J.C. Flowers & Co is one of a handful of buyout shops interested in the process, sources said.

But some suitors are getting cold feet, as evident by Samsung Life Insurance's decision on Thursday to pull out of the race at the last minute..

RARE ASSET

ING's Asian operations offer a ready platform for insurers keen to expand their Asian footprint and tap into the region's rapid premium growth. Life insurance premiums in emerging Asia are forecast to grow at 9.5 percent this year and 8.7 percent next year, nearly three times the world average, according to Swiss Re estimates.

"This is a once-in-a-lifetime opportunity which many CEOs will find hard to let go," said one banker who is advising a potential buyer.

ING CEO Jan Hommen said last week that the Asian divestments would probably fetch less than 8 billion euros ($10.2 billion).

Sources said bidding was unlikely to reach that far and that offers might not climb much past $7 billion. A deal would need to surpass $7.06 billion to become Asia's biggest insurance deal and overtake Australian fund manager AMP's 2011 purchase of AXA's Australian unit, Thomson Reuters data shows.

18 May, 2012