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BNP’s Cardif in talks to buy Indonesian life insurer stake

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BNP Paribas' insurance arm is in talks to buy a significant minority stake in PT Bank Rakyat Indonesia's life insurer, according to people familiar with the matter.

[HONG KONG] BNP Paribas' insurance arm is in talks to buy a significant minority stake in PT Bank Rakyat Indonesia's life insurer, according to people familiar with the matter.

BNP Paribas Cardif submitted the highest bid for a stake in PT Asuransi BRI Life, the people said, asking not to be identified because the matter is private. Other bidders including FWD Group, backed by Hong Kong billionaire Richard Li, remain interested in acquiring the share, the people said.

Bank Rakyat Indonesia, the country's oldest lender, had revived earlier this year its plan to sell a stake in its life insurance unit for about US$500 million, Bloomberg News reported in March. A transaction would involve a so-called bancassurance partnership, which allows an insurer to sell its products through the bank's branches, the people have said.

An agreement could be reached within the next few weeks, the people said. Talks are ongoing and the companies could decide against pursuing a transaction, they said.

Representatives for Cardif and FWD declined to comment, while a representative for Bank Rakyat Indonesia said the bank is still studying the matter internally.

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This would be at least the third attempt by state-owned Bank Rakyat to sell a stake in the insurer. The lender tried to dispose a 40 per cent stake in BRI Life in 2015. At that time, FWD and BNP Paribas Cardif were already among parties vying for the holding, Bloomberg News had reported. In 2018, Morgan Stanley was hired to advise on the sale only to see the process put on ice again last year.

Shares of Bank Rakyat Indonesia have fallen 44 per cent this year, giving the lender a market value of about US$20.5 billion.

Cardif reported a pre-tax net profit excluding some items of 1.7 billion euros (S$2.61 billion) last year, a 16 per cent increase from a year earlier. It had 260 billion euros in assets under management as of the end of 2019, and a presence in Europe, Asia and Latin America.

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