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Allianz is said to progress in talks for Malaysian car insurer

[KUALA LUMPUR] Allianz Malaysia has been chosen to progress in talks to acquire Malaysia's second-biggest car insurer after edging out Japanese rival Mitsui Sumitomo Insurance, people with knowledge of the matter said.

AmGeneral Insurance's owners have decided to enter detailed discussions with Allianz on a potential deal, according to the people, who asked not to be identified because the information is private. They have applied for Malaysian central bank approval to allow Allianz to conduct due diligence on the business and formally proceed with negotiations on terms of a transaction, one of the people said.

The insurer could be valued at about US$800 million in a sale, the people said. AMMB Holdings and Insurance Australia Group, which jointly own AmGeneral, haven't ruled out pursuing a deal with other suitors should talks with Allianz falter, according to one of the people.

A representative for AMMB said nobody was immediately available to comment. Representatives for Allianz, IAG and Mitsui Sumitomo Insurance declined to comment.

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Any deal could encourage Prudential and Tokio Marine Holdings, which have also been considering selling stakes in their Malaysian insurance units. Bloomberg News reported last month that Allianz Malaysia and Mitsui, a unit of Japan-listed MS&AD Insurance Group Holdings, were shortlisted to bid for AmGeneral.

Kuala Lumpur-listed AMMB owns 51 per cent of AmGeneral, while IAG holds the remainder. An acquisition could also include a bancassurance agreement, which would give the buyer the right to distribute insurance products through AMMB's branch network, people familiar with the matter said last month.

AmGeneral is the country's second-biggest auto insurer with a market share of 15 per cent, its website shows. It ranked fifth in the overall Malaysian general insurance market as of the first half of 2018. The company has more than 4 million policies and a network of 7,000 agents and dealers.

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