(Bloomberg) -- ING Groep NV, facing a regulatory deadline to sell its insurance business, is pressing prospective buyers of operations in Southeast Asia and Hong Kong to also acquire part of its Japanese unit, three people with knowledge of the matter said.

Bidders including Manulife Financial Corp. have expressed willingness to buy the Japanese operations as part of a deal for ING units in Hong Kong and Southeast Asia, said the people, who asked not to be identified as the process is private.

ING said on Aug. 8 its Asian insurance and asset-management businesses had a combined book value of 6.6 billion euros ($8.3 billion). Its operations in the region encompass emerging markets such as Malaysia, where rising incomes are fueling demand, and Japan, which is grappling with deflation and an aging population.

"It could make sense to press a buyer of the attractive Southeast Asia operations to accept a less popular unit as part of the deal to avoid being stuck with leftovers," said Dirk Peeters, a Brussels-based analyst at KBC Securities. "Country- by-country sales could lead to higher proceeds, yet can be more cumbersome in terms of capital demands and inter-group debt."

The sale of ING's Japanese operations excludes its variable annuities business there, said the people. ING stopped selling variable annuities in Japan in 2009. The business still had 384,000 policies with a total account value of about 17.9 billion euros as of June 30, according to Victorina de Boer, an ING spokeswoman.

Shares Rise

Variable annuities offer policy holders guaranteed benefits while relying on investment returns. Dropping equity markets and interest rates can push up costs of the guaranteed returns.

ING shares rose 0.4 percent to 6.13 euros at 12:46 p.m. in Amsterdam, compared with a 0.1 percent drop in the Stoxx Europe 600 Insurance Index. The shares advanced 6.5 percent in the last four days after the company announced the sale of its Canadian online bank for 2.5 billion euros.

KB Financial Group Inc. has bid for ING's South Korean operations while Apollo Global Management LLC and J.C. Flowers & Co. are in talks to buy the variable annuity business in Japan, people with knowledge of the process said in July.

ING is also evaluating offers that include Japanese operations from AIA Group Ltd. and Hong Kong billionaire Richard Li, one person said. ING's De Boer declined to comment on the sale process, as did spokesmen for Manulife, AIA and Li.

EU Requirements

ING's corporate-owned life insurance and variable annuity businesses in Japan had a book value of 2.1 billion euros at the end of June, according to the company. That excludes 1 billion euros of capital held in the firm's reinsurance unit, which re- insures the variable annuity book.

ING has to sell the insurance business globally before the end of 2013 to comply with conditions imposed by the European Union after the firm received state aid in 2008 and 2009.

To date it has repaid 7 billion euros out of 10 billion euros, with 2 billion euros in interest and premiums. Chief Executive Officer Jan Hommen said last month he intends to repay another tranche this year.

The sale of ING's Canadian online bank and the proceeds of the Asian insurance operations should help ING to repay the remaining state aid and offer more flexibility on the divestment of the European insurance business, Peeters said.

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