KUALA LUMPUR (June 22): Italy’s largest insurer Generali is proposing to buy a 70% stake in AXA Affin Life Insurance (AALI), a 53% stake in AXA Affin General Insurance (AAGI), as well as enlarge its current stake in MPI Generali Insurance Bhd from 49% currently to 100%.
In a statement, Generali said it will acquire a 49% stake currently held by AXA and a 21% stake currently held by Affin Bank Bhd in AALI, while it will purchase a 49.99% stake in AAGI from AXA and a further 3% stake from Affin and minority shareholders.Generali also plans to buy its joint-venture partner Multi-Purpose Capital Holdings Bhd (MPCHB) out of MPI Generali Insurance.
The total consideration for the combined transactions is of RM1.29 billion subject to closing adjustments, said Generali in a statement.
As a result of the transactions, Generali will operate in Malaysia through two companies one in the property and casualty (P&C) segment and the other in the life segment.
In the P&C segment, Generali said both AAGI and MPI Generali will be merged following the transactions, creating one of Malaysia’s leading general insurance operations, with Generali holding a 70% stake while Affin Bank will hold the remaining 30%.
“The acquisitions will position Generali as one of the leading insurers in the Malaysian market, creating the second largest P&C insurer by market share and entering the country’s life insurance segment,” Generali added.
Generali said it has submitted an application to the local regulator in order to acquire the remaining shares of MPI Generali Insurance held by MPCHB. The transactions are subject to the approvals of the Minister of Finance and Bank Negara Malaysia (BNM).
Generali will also enter into an exclusive bancassurance agreement with Affin Bank for the sale of conventional P&C and life insurance products.
“Generali, AXA, Affin Bank and MPHB Capital are working together to obtain the required regulatory approvals. Generali will commence the necessary integration planning to develop an organisation that leverages the skills, experience and expertise of all the staff of the combined business,” it added.
The transactions are expected to be concluded in the second quarter of 2022.
HSBC is acting as exclusive financial adviser to Generali on the transactions. Law firm Wong & Partners is acting as legal adviser.
Jaime Anchústegui Melgarejo, chief executive officer international of Generali Group, said the transactions are fully aligned with Generali’s strategy to strengthen its leadership position in high potential markets like Malaysia, which represents a very attractive opportunity as it is home to a growing middle-class population and with an insurance penetration rate that is still relatively low compared to other more mature markets in the Asian region.
Meanwhile, Generali Asia’s regional officer Rob Leonardi said this is an exciting time for Generali in Malaysia and for the group’s growth strategy in Asia.
“Over the last five years we have enjoyed working together with our business partner to reshape MPI Generali and now we can further optimise our strategic position, secure economies of scale for more efficient operations and deliver even greater value for our customers. We have ambitions to further transform and strengthen our business in this important market and look forward to working with our customers, employees, agents, partners and distributors on this journey,” Leonardi added.
Generali has been active in Malaysia since 2015, when it acquired a 49% stake in Multi-Purpose Insurans Bhd a P&C insurance subsidiary of MPCHB to create MPI Generali.
MPCHB is a wholly-owned subsidiary of MPHB Capital Bhd.
To recap, MPHB Capital announced on Bursa Malaysia in August last year that it was seeking BNM’s green light to start talks with Generali Asia on the divestment of its 51% stake in MPI Generali.
Share price of MPHB Capital rose 12 sen or 7.64% to RM1.69 at 3.22pm for a market capitalisation of RM1.14 billion.
Over the past one year, the stock has more than doubled from 79 sen.
KUALA LUMPUR (June 22): Italy’s largest insurer Generali is proposing to buy a 70% stake in AXA Affin Life Insurance (AALI), a 53% stake in AXA Affin General Insurance (AAGI), as well as enlarge its current stake in MPI Generali Insurance Bhd from 49% current…
