Maybank’s Etiqa Insurance Unit Said to Weigh Bid for Mega Life

Malayan Banking Bhd.’s Etiqa insurance unit is considering a bid for Indonesia’s PT Mega Life Asuransi Jiwa, people with knowledge of the matter said.

Etiqa has held preliminary discussions with the Indonesian insurer, one of the people said, asking not to be named as the deliberations are private. Mega Life’s shareholders, PT Sinar Mas Multiartha Tbk and CT Corp., are seeking to sell as much as 80 percent of the insurer for about $200 million to $300 million, two people said.

Maybank, Malaysia’s largest lender, has bought assets in faster-growing markets as it aims to generate 40 percent of operating profit abroad by 2015. Companies including Sun Life Financial Inc. and Dai-ichi Life Insurance Co. have announced $7.6 billion of insurance acquisitions in Southeast Asia since the start of last year, data compiled by Bloomberg show.

Indonesia is “definitely” an area of interest for Etiqa, and it is “very clear” the insurer will follow Maybank in expanding in Southeast Asia, Chief Executive Officer Kamaludin Ahmad said in an e-mailed response to questions from Bloomberg News. Etiqa is “always open” to talks with various parties, Ahmad said without commenting on discussions with Mega Life.

Officials at CT Corp. and Sinar Mas didn’t immediately respond to e-mails seeking comment.

Richest Indonesian

In Indonesia, Dai-ichi bought a stake in PT Panin Financial Tbk’s life insurance unit for 3.3 trillion rupiah ($334 million) in June. Sumitomo Life Insurance Co. said today it will buy a 40 percent stake in Bank Negara Indonesia’s life insurance unit for 36.2 billion yen ($354 million).

Etiqa, formed through the merger of several insurers and Islamic insurance companies since 2005, had assets of 28 billion ringgit ($8.7 billion) as of September, according to a Maybank presentation. It distributes products through 23,000 agents, 30 insurance branches and more than 450 Maybank branches, ATMs and third-party banks, its website shows.

Maybank also owns 88 percent of PT Bank Internasional Indonesia Tbk, the country’s eighth-largest lender by market value. Jakarta-based Mega Life, established in 2003 as a joint venture between Sinar Mas Group and CT Corp., has issued 1 million policies in Indonesia, according to CT’s website.

Sinar Mas, founded by Indonesia’s richest man Eka Tjipta Widjaja, is one of the country’s largest business groups. Widjaja has a net worth of $7.5 billion, according to the Bloomberg Billionaires Index. CT Corp., led by Chairman Chairul Tanjung, also controls mid-sized lender PT Bank Mega Tbk.

Before it's here, it's on the Bloomberg Terminal.