Sumitomo Life Insurance Co. is among companies preparing to bid for a stake in the life insurance unit of PT Bank Negara Indonesia, according to two people with knowledge of the matter.
Sumitomo Life, Japan’s third-largest life insurer, is weighing an offer for a 40 percent stake that may be valued at as much as $800 million, the people said, asking not to be identified because the deliberations are private. The Osaka-based company has dropped out of bidding for part of Thai Life Insurance Pcl, leaving Meiji Yasuda Life Insurance Co. as the sole remaining suitor, two people said.
Bank Negara, controlled by Indonesia’s government, plans to start the sale of the insurance unit stake in the next two weeks, the people said. The deal follows the sale of a minority holding in the life insurance unit of PT Panin Financial Tbk to Japanese insurer Dai-ichi Life Insurance Co. for 3.3 trillion rupiah ($330 million) this month.
Buyers, attracted by an emerging middle class getting coverage for the first time, have spent more than $6.6 billion acquiring insurance assets in Southeast Asia over the past two years, data compiled by Bloomberg show. Indonesia is more attractive for overseas buyers as foreign ownership limits for insurers are higher than in other Asian countries, Fitch Ratings said this month.
Both Sumitomo Life and Meiji Yasuda made final offers for a 15 percent stake in closely held Thai Life, Thailand’s second-largest life insurer, people with knowledge of the matter said last month. The bids valued the stake at as much as $700 million.
Kousuke Miyatake, a spokesman at Sumitomo Life, declined to comment, as did Kimihiko Suzuki at Meiji Yasuda and an official at Thai Life. Yap Tjay Soen, finance director at Bank Negara, couldn’t immediately be reached. Reuters earlier reported that Meiji Yasuda had entered exclusive talks for a stake in Thai Life.
Japanese acquirers have announced $3 billion of financial asset purchases in Southeast Asia in the past two years, more than in the previous six years combined, data compiled by Bloomberg show. That trend is set to continue with Japanese companies’ cash reaching a record in the first quarter, surpassing the stockpile held by American companies, Bank of Japan data showed.
Sumitomo Life bought 18 percent of Vietnam’s biggest insurer, Bao Viet Holdings, last December, and set up a venture with PICC Holdings Co., Asia Financial Group and Bangkok Bank in 2005.