MERGERS AND ACQUISITIONS

CIMB considers sale of stake in Aviva Insurance venture

PUBLISHED : Wednesday, 28 November, 2012, 11:58am
UPDATED : Wednesday, 28 November, 2012, 3:33pm

CIMB Group, Malaysia’s second-largest bank, is considering selling its 51 per cent stake in an insurance joint venture with Aviva, said four people with knowledge of the matter.

Prudential, Sun Life Financial and Manulife Financial have made final offers to buy the business from CIMB and Aviva, the U.K.’s second-biggest insurer by market value, the people said, asking not to be identified as the process is private. The Wall Street Journal in May reported that Aviva was looking to sell its stake.

A sale of the entire venture, called CIMB Aviva Assurance, may fetch about US$1 billion, according to three of the people. CIMB Aviva Assurance, led by Chief Executive Officer Yen Saw, doubled profit to 49.7 million ringgit (US$16.3 million) in the six months through June, according to its website.

The WSJ in May reported that Aviva had hired Morgan Stanley to sell its 49 per cent stake in the venture with CIMB, citing people it didn’t identify. Spokesmen at CIMB, Aviva, Manulife, and Prudential declined to comment on the sale process.

“Sun Life is focused on growing our business in Asia both organically and through acquisitions but we cannot comment on specific transactions,” Mei Velasques, a spokeswoman at Canada’s third-largest insurer, said in an e-mailed response to questions. Sun Life has an insurance joint venture with CIMB in Indonesia called PT CIMB Sun Life.

CIMB is seeking approval from Malaysia’s central bank to sell its stake in the joint venture, two of the people said.

In October, AIA Group, the third-largest Asia-based insurer, agreed to buy ING Groep NV’s insurance business in Malaysia for about 1.3 billion euros (US$1.7 billion). The deal valued ING operations at 16.9 times 2011 earnings and 2.2 times book value in the first half of 2012, ING said.