Business

Tuesday November 11, 2008

Friends Provident to buy 49% of AmAssurance


KUALA LUMPUR: Friends Provident plc is set to buy a 49% stake in AmAssurance Bhd.

The deal would see AmAssurance gain a partner that would help it grow the life insurance side of AMMB Holdings Bhd’s business.

Insurance Australia Group Ltd has a 30% stake in AmAssurance but wants to sell that and take a 49% stake in AMMB’s general insurance business, AmG Insurance Bhd.

The deal with Friends Provident should be sealed in a few weeks and comes on the heels of AmG Insurance’s proposal to buy the general insurance business of Malaysian Assurance Alliance Bhd (MAA) for RM274.8mil or at price-to-book value of 2.6 times.

AmG Insurance also bought a 4.9% stake in MAA Takaful Bhd for RM16.2mil, which is intended to give AMMB entry into the takaful business.

“We think this is a significant transaction, and we are happy to have the opportunity to be able to offer a full range of Islamic financial services to our customers, and that our general insurance business will grow in line with our strategic aspirations,’’ said AmBank Group chairman Tan Sri Azman Hashim in a statement.

MAA said the divestment of the general insurance business would allow it to focus on further developing its life insurance business. The partnership with AMMB on the takaful business would provide it access to the valuable bancassurance channel, it said.

MAA Holdings Bhd executive chairman Tunku Ya’acob Tunku Abdullah said the proposed deal would enhance the scale of MAA’s takaful business and also strengthen MAA’s capital base.

 
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