MetLife Said in Final Talks for Stakes in AMMB’s Insurance UnitsElffie Chew, Joyce Koh and Jonathan Browning
MetLife Inc. is in exclusive talks to invest about 800 million ringgit ($246 million) in AMMB Holdings Bhd.’s life insurance units in Malaysia, two people with knowledge of the matter said.
MetLife, the largest U.S. life insurer, is in discussions to purchase 51 percent of Kuala Lumpur-based AMMB’s life insurance unit and 49 percent of its Islamic insurance arm, said one of the people, asking not to be named as the information is private. The companies are finalizing details of an agreement and aim to submit the plan to the Malaysian central bank by year-end for approval, the person said.
New York-based MetLife joins Canada’s Sun Life Financial Inc. and Japan’s Dai-ichi Life Insurance Co. in seeking acquisitions in Southeast Asia to bolster returns as economic growth drives demand for policies. More than $7.9 billion of insurance acquisitions have been announced in the region since the start of last year, according to data compiled by Bloomberg.
Simon Smith, a spokesman for MetLife in Hong Kong, declined to comment. Officials at AMMB couldn’t be immediately reached for comments via telephone and e-mail.
Bidders were initially invited to make binding offers for as much as 70 percent of the insurance businesses, people familiar with the matter said in June. AMMB reduced the size of the stake on offer after the Malaysian central bank expressed concerns about such a large percentage being sold to a foreign company, two people said.
MetLife, led by Chief Executive Officer Steven Kandarian, said in May last year it aims to generate at least 20 percent of operating earnings from emerging markets by 2016, compared with 14 percent in 2012.
It acquired American Life Insurance Co. from American International Group Inc. in 2010 to expand beyond the U.S. and said in February it will buy Chilean pension provider AFP Provida SA for $2 billion. The company announced in September a life-insurance joint venture in Vietnam.
AMMB Managing Director Ashok Ramamurthy said in September the company is seeking to sell a majority stake in its life insurance unit and plans to keep a controlling share in its Islamic insurance arm. Besides MetLife, Manulife Financial Corp., Pacific Century Group and ACE Ltd. were invited to make binding bids for the businesses, people with knowledge of the matter said in June.