KUALA LUMPUR: Malayan Banking Bhd
(Maybank) is proposing to buy out Ageas Insurance International NV's 30.95% stake in the holding company for Etiqa's businesses in Malaysia and Singapore for RM4.83bil, as the country's biggest lender attempts to take full ownership of the insurer.
In a statement, Maybank said it had entered into an implementation agreement with Ageas as it moved closer towards purchasing the latter's equity in Maybank Ageas Holdings Bhd (MAHB). Maybank already owns a majority 69.05% stake in MAHB.
Etiqa provides a full range of life and general conventional insurance products as well as family and general takaful products through multi-channel distribution.
According to Maybank, the proposed acquisition will strengthen MAHB's position as a national insurance and takaful champion through Maybank's customer base, as well as gain greater flexibility to expand across Southeast Asia by leveraging the banking group's offerings and regional operations.
It said the purchase will also deliver immediate Patami, earnings per share (EPS) and return on equity (ROE) accretion and will contribute to sustainable and resilient long-term value creation through durable earnings growth and higher ROE.
Additionally, it would boost capital management efficiency across the insurance Group with capacity for sustainable elevated dividend payout in support of Maybank group’s capital management strategy.
Maybank president and group CEO Datuk Sri Khairussaleh Ramli said the transaction represents an important milestone for Maybank in charting its insurance and takaful business’ next growth phase across Southeast Asia.
"We will also continue to invest in innovations and leverage digital capabilities to improve productivity, reduce operating costs, and deliver better customer experience," he said.
The RM4.83bil price tag - which reflects a price-to-book multiple of 1.98x and price-to-earnings multiple of 15.3x - is derived after adjusting for RM800mil dividend proposed to be paid by MAHB on the completion date, of which Ageas’ entitlement is RM248mil and the balance of RM552mil will be allocated to Maybank.
Maybank said it has submitted a formal application to Bank Negara for approval.
Maybank Investment Bank and Morgan Stanley Asia (Singapore) Pte are financial advisor and international financial advisor, respectively, to Maybank on the proposed acquisition.
