Great Eastern’s Malaysian units acquire AmMetLife, enter exclusive distribution partnership

SUBSIDIARIES of insurance company Great Eastern Holdings (GEH) have inked an agreement to acquire AmMetLife Insurance Berhad (AML) and AmMetLife Takaful Berhad (AMT).

The two subsidiaries are Great Eastern Life Assurance (Malaysia) Berhad (GELM) and Great Eastern Takaful Berhad (GETB).

Under the agreement, GELM will fully acquire the shares of AML, while GETB willl fully acquire those of AMT.

In addition, the four entities will enter into exclusive 20-year bancassurance and bancatakaful agreements for the distribution of life insurance and family takaful products, a type of Islamic insurance, through the distribution network of AMMB Holdings’ banking subsidiaries across Malaysia. The latter two are AmBank (M) Berhad and AmBank Islamic Berhad.

The consideration for the proposed acquisition and exclusive distribution partnership is approximately RM1.121 billion (S$325 million) and payable wholly in cash, GEH said in a bourse filing on Monday (Oct 2).

The figure was arrived at following arm’s length negotiations on a willing-buyer, willing-seller basis, based on the aggregate net value of AML and AMT and taking into account factors such as the business prospects of the distribution partnership, the company said.

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Based on audited financial statements of AML and AMT as at Mar 31, their aggregate net asset value was approximately RM819 million.

The final amount of the consideration will be subject to customary adjustment in accordance with the terms of the sale-and-purchase agreement, GEH said. The proposed acquisition is not expected to have a material impact on the net asset value or earnings per share of GEH for the current financial year, the company added.

GEH shares closed S$0.05 or 0.3 per cent lower at S$18.00 on Monday, before the announcement.