FWD to bag CBA’s Indonesia unit
FWD Group, led by Hong Kong billionaire Richard Li, will buy control of an Indonesian life insurance venture from Commonwealth Bank of Australia (CBA) for A$426 million (US$300 million) as it seeks to expand across Asia.
The transaction is the latest of several in Southeast Asia’s insurance sector with buyers lured by lower insurance penetration levels and robust growth rates for insurance premiums.
The deal was hotly contested. At least five insurers, including Britain’s Prudential and Canada’s Sun Life had bid for CBA’s 80 percent stake in the Indonesian insurance unit, PT Commonwealth Life, sources have said.
FWD has also agreed to buy HSBC Holdings Plc’s stake in a Malaysian insurance joint venture, sources familiar with the matter said in August.
The two deals will add to businesses in Singapore, Japan, the Philippines, Thailand, and Vietnam as well as FWD’s home market.
CBA’s sale of its 80 percent stake comes as most big Australian banks, under intense scrutiny from a powerful inquiry into misconduct in the country’s financial sector, streamline their operations to focus on lending.
“The transaction aligns with CBA’s strategy to focus on its core banking businesses and to create a simpler and better bank,” the bank said in a statement on Tuesday.
CBA said the deal valued the Indonesian entity at three times its book value as of June 30. It added that its Indonesian banking business PT Bank Commonwealth would enter a 15-year life insurance distribution partnership with FWD.
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