By Admin
KUALA LUMPUR (Feb 3): AMMB Holdings Bhd (KL:AMBANK) and MetLife International Holdings LLC have mutually agreed to terminate the proposed disposal of their jointly owned insurance and takaful businesses to Great Eastern Holdings Ltd, a deal initially valued at about RM1.12 billion.
In a filing with Bursa Malaysia on Monday, AMMB said the implementation agreement dated Oct 2, 2023 has been terminated and that the parties involved — namely AMMB, MetLife, and Great Eastern — have collectively decided not to proceed with the sale of AmMetLife Insurance Bhd and AmMetLife Takaful Bhd to Great Eastern Life Assurance (Malaysia) Bhd and Great Eastern Takaful Bhd.
The reason for the termination was not disclosed. Great Eastern made a similar announcement via a bourse filing to the Singapore stock exchange on Monday.
AMMB’s wholly owned AMAB Holdings Sdn Bhd holds 50% minus one share in AmMetLife Insurance and 50% plus one share in AmMetLife Takaful. MetLife owns the remaining stakes in both entities.
The original plan stipulated that Great Eastern Life Assurance and Great Eastern Takaful would acquire 100% of the share capital in both AmMetLife entities. Following the acquisition, the two insurance and takaful businesses were intended to be merged and integrated with Great Eastern’s existing life assurance and takaful operations.
The merger also included exclusive 20-year bancassurance and bancatakaful agreements, ensuring the distribution of life insurance and family takaful products through AMMB’s network of banking subsidiaries across Malaysia.
The strategic partnership between US-headquartered MetLife and AMMB dates back to April 2014, when MetLife acquired a 50% stake in AmLife Insurance and AmFamily Takaful Bhd (later renamed AmMetLife Takaful) for RM812 million or US$249 million.
At Monday’s noon market break, AMMB shares were unchanged at RM5.64 with a market capitalisation of RM18.69 billion.
Trading of Great Eastern shares has been suspended since July 15 last year, after its parent Oversea-Chinese Banking Corporation (OCBC) acquired close to 94% of its shares following a S$1.4 billion (RM4.6 billion) bid it made in May for the remaining 11.56% it did not own in the insurance company — one of the largest in Malaysia and Singapore — to take it private. But the shareholding is not sufficient to have Great Eastern delisted from the Singapore Exchange or for OCBC to compulsorily acquire the rest of the shares it doesn’t own.
OCBC reportedly faced some holdouts, from some long-time shareholders who have a combined 3% stake in Great Eastern. Last month, the Financial Times reported that UK activist investor Palliser Capital called the deal “gravely unfair” and was looking to disrupt the takeover of the insurance company.