Axa Group has entered into an agreement with Generali to sell its insurance operations in Malaysia.
The deal includes Axa’s 49.99% shareholding in Axa Affin General Insurance and 49% shareholding in Axa Affin Life Insurance.
Under the terms, Generali will pay MYR688m (£120m, $166m, €140m) in cash.
The deal is subject to closing conditions, including regulatory approval, and Axa expects it to complete by Q2 2022.
Also, Generali will receive a further 23% stake in the life firm and 3% stake in the general insurer from Affin, bringing its total shareholding to 70% and 53%, respectively.
Generali also asked for approval from the local regulator to increase its shareholding in MPI Generali Insurans Berhad, a strategic partnership with Multi-Purpose Capital Holdings Berhad, to 100% from 49%.
Business expansion
Once the deal is complete, the Italian insurance giant intends to merge Axa Affin General Insurance and MPI Generali to create “one of Malaysia’s largest general insurance operations, with Generali holding a 70% stake”.
The merged company will trade under the Generali name and Affin Bank will hold the remaining 30%.
The two firms will also enter into an exclusive bancassurance agreement for the sale of conventional property and casualty and life insurance products.
The deals will cost Generali a total of MYR1.3bn (£225m, $311m, €262m).
‘Very attractive opportunity’
Jaime Anchústegui Melgarejo, chief executive of international at 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.”
Rob Leonardi, regional officer at Generali Asia, added: “This is an exciting time for Generali in Malaysia and for our 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.”
