MetLife Inc in exclusive talks to buy stake in life insurance units of AMMB Holdings- sources
Sources told Bloomberg that life insurer MetLife Inc is in exclusive discussions with AMMB Holdings Bhd to purchase the latter's life insurance units in Malaysia. The deal is reported to be worth MYR 800 million or $246 million, the report said.
One of the sources said the biggest life insurance firm in the US is planning to buy a 51% stake in AMMB's life insurance unit and another 49% stake in the company's Islamic insurance arm. The sources spoke on the condition of anonymity because the information is confidential. The person added that the details of the agreement are being finalized by the firms and that they intend to submit the plan by the end of the year to the Malaysian central bank to get approval.
The report said MetLife has joined other insurance firms like Canada-based Sun Life Financial Inc and Japan-based Dai-ichi Life Insurance Co in looking for Southeast Asian acquisitions to improve returns, as demand for policies is seen to increase due to economic growth. Bloomberg data showed that since the beginning of 2012, over $7.9 billion worth of insurance acquisitions have been announced in Southeast Asian.
In June, bidders were initially invited to submit binding offers for up to 70% of the insurance units, the report said. However, sources said AMMB lowered the stake size it had offered after the Malaysian regulators aired their concerns about a foreign company acquiring such a large percentage of the stake.
Last year, MetLife said it plans to get at least 20% of its operating earnings from emerging markets in three years. This would be an increase from 14% generated last year. It bought American Life Insurance Co from American International Group Inc three years ago so it could grow beyond the US. In February this year, MetLife said it would acquire AFP Provida, a pension provider in Chile, in a $2 billion deal.