^

Business

Sun Life acquires Malaysian insurer

The Philippine Star

MANILA, Philippines - Sun Life Financial Inc. and Malaysian state investor Khazanah will buy Aviva Plc’s Malaysian insurance joint venture with lender CIMB Group for 1.8 billion Malaysian ringgit ($597 million) in a deal that will accelerate Sun Life’s push into Southeast Asia.

Under the terms of the deal, Sun Life and Khazanah Nasional Bhd will buy 49 percent each in CIMB Aviva Assurance Berhad and Islamic insurer CIMB Aviva Takaful Berhad, which together form the joint venture.

CIMB Group Holdings will retain a two percent stake. Sun Life and Khazanah, which owns a 29.9-percent stake in CIMB, will each pay half of the purchase price.

Sun Life, Canada’s third-largest insurer, has targeted the region for expansion due to its rapid growth, high savings rates, and relative under-penetration of insurance products.

Sun Life is now present in seven Asian markets, including four in Southeast Asia, following its launch of a joint venture in Vietnam last year with PVI Holdings.

“We see huge opportunity there. There are 600 million people, the economies are growing, there is a growing middle class” in Southeast Asia, Kevin Strain, president of Sun Life Financial Asia, told Reuters.

Britain’s Aviva, the world No. 6 insurer, is exiting markets across the world to boost its underperforming share price. Last month, Aviva sold its US business for $1.8 billion.

The transaction includes an exclusive right to distribute Sun Life insurance products, including takaful products, through CIMB Bank’s network across Malaysia. This network includes 312 branches across the country and eight million customers.

“This transaction is perfectly aligned with our strategy for expanding our footprint in Asia,” said Strain said.

“With Khazanah and CIMB, we have very strong partners with a broad distribution platform, and we are investing in a country with one of the most developed economies in the ASEAN region and a growing middle class. The combination of Sun Life’s global insurance experience, Khazanah’s strategic and financial expertise as an investor in the region, and CIMB’s strong banking presence, reputation and brand in Malaysia and throughout the region, will deliver excellent value to customers and make the company a leader in the industry.”

The proposed acquisition is still subject to regulatory approvals in Canada and Malaysia. The transaction is expected to close by the first half of 2013.

AVIVA

AVIVA ASSURANCE BERHAD AND ISLAMIC

AVIVA PLC

AVIVA TAKAFUL BERHAD

CANADA AND MALAYSIA

CIMB

LIFE

SOUTHEAST ASIA

SUN

SUN LIFE

  • Latest
  • Trending
Latest
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

FORGOT PASSWORD?
SIGN IN
or sign in with