The FINANCIAL -- ING has reached an
agreement with AIA Group on the sale of ING’s insurance
operations in Malaysia, which include its life insurance business, its
market-leading employee benefits business and its 60-percent stake in
ING Public Takaful Ehsan Berhad.
Under the terms agreed, ING is expected to receive a total consideration of approximately EUR 1.3 billion.
The agreement, which is subject to regulatory approvals, is part of the previously announced intended divestment of ING’s Asian insurance and investment management businesses. The process for the remaining businesses is on-going. Further announcements will be made if and when appropriate.
“Today’s announcement is the first major step in the divestment of our Asian insurance and investment management businesses and shows that ING continues to make steady progress in the restructuring of our company,” said Jan Hommen, CEO of ING Group. “AIA is an established player in Asia, and the combination of our strong insurance operations with their longstanding track record in Malaysia will create a market leader well positioned to benefit from the growth opportunities available in the country.”
The proposed transaction values ING’s Malaysian insurance operations at 16.9x 2011 earnings and 2.2x 1H2012 book value of approximately EUR 600 million, both on an IFRS basis. Earnings until closing are to the benefit of AIA. At closing, ING expects the sale to deliver a net gain of approximately EUR 780 million, subject to potential adjustments at closing, customary for this type of transaction.
ING is a leading life insurer in Malaysia offering a complete suite of insurance products, including life, general, employee benefits and Takaful. As ING Group reported, the latter is offered through ING Public Takaful Ehsan Berhad, a joint venture with Public Bank Berhad, Malaysia’s third-largest bank, and Public Islamic Bank Berhad, one of Malaysia’s top 5 Islamic banks. ING’s insurance businesses in Malaysia serve more than 1.6 million customers through approximately 1,200 employees and approximately 9,200 tied agents.
AIA is the largest independent publicly-listed pan-Asian Life insurance company. It is active across 15 markets in Asia Pacific and has leading positions across many of these markets. AIA has a longstanding presence in Malaysia, having first established operations there in 1948.
ING Investment Management’s funds management business in Malaysia is outside the scope of this transaction. The transaction announced today does not impact ING’s Asian banking activities.
Subject to regulatory approvals in Malaysia and the Netherlands, the transaction is expected to close in the first quarter of 2013.