Prudential, the UK-based insurer below stress from US activist investor Third Level, mentioned on Thursday it might purchase FWD Group’s Thailand bancassurance partnership for Bt24.5bn ($754m).
The deal will see Prudential’s Thai unit purchase the correct to promote life insurance coverage merchandise within the south-east Asian nation by Bangkok-based TMB Financial institution.
Prudential could have unique rights to promote life insurance coverage merchandise by the community of TMB, which is within the technique of merging with Thailand’s Thanachart Financial institution, for an preliminary 15 years from the start of 2021.
The 2 banks are set to turn out to be Thailand’s sixth-largest by deposits and fourth-largest by the variety of branches after the merger, which is because of be accomplished subsequent 12 months.
Prudential, which has been lively in Thailand for greater than 24 years and claims greater than 1.6m clients, mentioned it might be paying for the Thai partnership in two instalments, with Bt12bn due in April 2020 and the rest on January 1, 2021.
Its sale of the partnership to Prudential might assist to ease potential antitrust challenges for FWD at a time when the insurance coverage group, managed by Hong Kong billionaire Richard Li, son of the tycoon Li Ka-shing, has been increasing aggressively within the life enterprise throughout Asia.
FWD purchased the life insurance coverage enterprise of Siam Industrial Financial institution, certainly one of Thailand’s greatest by belongings, for $3bn in September within the biggest-ever insurance coverage takeover in south-east Asia.
The deal comes at a time when Prudential faces a problem from activist hedge fund Third Level. The fund, headed by Dan Loeb, in February unveiled a 5 per cent stake within the insurer and has argued that Jackson, its US enterprise, ought to be separated from the group’s fast-growing Asian enterprise.
Nic Nicandrou, Prudential’s Asia chief govt, mentioned the brand new partnership with TMB would mix the financial institution’s native data with its experience in life, well being, and financial savings companies and provides Thais entry to the group’s “quick rising and increasing digital platform”.