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UPDATE 1-ING sells stake in Chinese investment firm for 98 mln euros

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AMSTERDAM, Oct 8 (Reuters) - Dutch bank and insurance group ING said on Monday it has agreed to sell its 33.3 percent stake in Chinese investment management firm China Merchants Fund for 98 million euros ($128 million) to the two other joint venture partners.

The financial services group is in the process of selling its Asian investment management and insurance operations as it seeks to repay state aid and meet European requirements for its 2008 state bail-out.

The Chinese divestment will result in a net gain of 64 million euros, ING said in a statement. The Dutch group could raise around $7 billion from the whole Asian insurance sale.

China Merchants Bank Co Ltd and China Merchants Securities Co Ltd are the buyers of ING's stake in the Chinese investment business, which has a market share of about 3 percent in the Chinese mutual funds market, ING said.

(Reporting by Gilbert Kreijger; Editing by Sara Webb)

((gilbert.kreijger@thomsonreuters.com)(+31205045007)(Reuters

Messaging: gilbert.kreijger.reuters.com@reuters.net))

Keywords: ING CHINA/