Khazanah said to mull bid for billionaire Quek’s insurer stakes

Khazanah Nasional Bhd's 12th annual review pamphlet. (Generic photo)

KUALA LUMPUR: Khazanah Nasional Bhd, the US$27bil (RM107.5bil) Malaysian sovereign fund, is weighing a bid for control of the insurance operations of billionaire Tan Sri Quek Leng Chan’s Hong Leong Financial Group Bhd, people with knowledge of the matter said.

Khazanah is considering an offer for Hong Leong Financial’s 70% stake in Hong Leong Assurance Bhd and its 65% holding in Hong Leong MSIG Takaful Bhd, according to the people.

The bid could be valued at about RM3.2bil, one of the people said, asking not to be identified as the information is private. 

Any purchase would add to US$10.3bil (RM41bil) of insurance acquisitions in South-East Asia in the past five years, data compiled by Bloomberg show. Khazanah said in 2014 it’s seeking more insurance investments in Asia, which would add to holdings in domestic companies including some of the biggest banks, power producers and wireless operators.

Hong Leong Financial said last month that Malaysia’s central bank had no objection to it starting talks with “certain parties” on the sale of its stakes in the two insurance units. Quek, who is chairman of Hong Leong Financial, ranks as Malaysia’s fifth richest person with a net worth of US$4.3bil (RM17.1bil), according to the Bloomberg Billionaires Index.

A representative for Khazanah declined to comment. Tan Kong Khoon, the chief executive officer of Hong Leong Financial, didn’t immediately answer a call to his office seeking comment.

Islamic products

Fairfax Financial Holdings Ltd, the Canadian investment firm led by Prem Watsa, said last month it would buy 80% of Indonesian financial group PT Paninvest’s non-life insurance unit for US$161mil, according to the Bloomberg-compiled data. Hong Kong billionaire Richard Li’s FWD Group agreedin June to acquire the Vietnamese life insurance arm of Great Eastern Holdings Ltd for S$48.2mil (RM142.2mil).

Japan’s Mitsui Sumitomo Insurance Co bought 30% of Hong Leong Assurance in 2010, before adding a 35% stake the next year in Hong Leong MSIG, which offers Islamic insurance products.

Khazanah investments had a net asset value of RM109bil at the end of December, compared with RM110.7bil a year earlier, according to the fund. It partnered with Sun Life Financial Inc in 2013 to buy control of an insurance venture between Aviva Plc and CIMB Group Holdings Bhd for RM1.8bil. The same year, Khazanah agreed to purchase 90% of Turkish insurer Acibadem Saglik ve Hayat Sigorta AS for US$252mil (RM1bil). - Bloomberg