The financial giant will join with Khazanah for Aviva’s Malaysia business.
Sun Life Financial Inc., a Canadian company, and Khazanah, a Malaysian state investor, are making insurance news by joining forces to purchase the Malaysia business of Aviva Plc., the second largest insurer in the United Kingdom, and from lender CIMB Group.
This deal would considerably expand the Southeast Asia business of the third largest insurer in Canada.
Southeast Asia is making regular insurance news, lately, as its appeal continues to rise for insurers who are watching its high savings rates, rapid growth, and its young population. At the same time, Aviva has been leaving various markets worldwide in order to help to provide its slumping share price with some much needed support.
This most recent insurance news will involve a purchase of 49 percent each from Sun Life and Khazanah.
The purchase price has been listed in insurance news postings as being $594 million ($586 million CAD). CIMB Group Holdings Berhad will hang on to a stake of 2 percent. According to the Sun Life Financial Asia president, Kevin Strain, “We see huge opportunity there (in Southeast Asia). There are 600 million people, the economies are growing, there is a growing middle class.”
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This latest insurance news will bring Sun Life’s presence into seven different Asian markets. This includes four within the Southeast Asian marketplace.
Azman Mokhtar, the managing director at Khazanah, explained that this will be a weighty deal for the company. Mokhtar said that “This is an important investment for Khazanah. It marks not just an opportunity to invest into an asset in a growth sector, but also brings together a unique commercial partnership among three strong parties in their respective areas.”
Both the Canadian company and Khazanah will each be paying $293 million (CAD) into the deal. Khazanah currently has a 29.9 percent stake in CIMB. The two companies agreed to make the purchase as a joint venture, and includes a new exclusive bancassurance agreement for 20 years with CIMB Bank. The first hints at this latest insurance news were issued in an interview that took place on Sunday.