Generali purchases shares to strengthen position in Malaysia
Generali has signed an agreement in connection with the purchase of the majority of the shares held by AXA and Affin in two joint ventures
The shares include approximately 53 per cent of AXA Affin General Insurance Berhad (49.99 per cent from AXA and three per cent from Affin and minorities) and AXA Affin Life Insurance Berhad (49 per cent from AXA and 21 per cent from Affin), respectively.
The Group also submitted an application to the local regulator in order to acquire the remaining shares of MPI Generali Insurans Berhad (MPI Generali) held by its Malaysian joint venture partner, Multi-Purpose Capital Holdings Berhad (MPHB Capital). The transactions are subject to the approval of the Malaysian Minister of Finance and the Central Bank of Malaysia.
The total consideration for the combined transactions is of RM1,290 million, subject to closing adjustments.
As a result of the transactions, Generali will operate in Malaysia through two companies – one in the P&C segment and the other in the Life segment. In the P&C segment, Generali plans to merge the businesses of MPI Generali with AXA Affin General Insurance. Once the transactions are completed, Generali will hold 70 per cent in both the Life and P&C entities, which will trade under the Generali name. Affin Bank will hold the remaining 30 per cent.
Positioning Generali as a leading insurer in Malaysia
The acquisitions will position Generali as one of the leading insurers in the Malaysian market, creating the second P&C insurer by market share and entering the country’s Life insurance segment.
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. The expected completion date of the acquisition is in the second quarter of 2022.
Jaime Anchústegui Melgarejo, CEO International, 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, 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.”
Earlier this year, AXA entered into an agreement with Generali to sell its insurance operations in Greece.