Prudential-BSN JV In RM518 Million Uni.Asia Life Purchase02 Jan 2014
PRUDENTIAL Financial Inc (PFI) and Bank Simpanan Nasionnal (BSN) have announced the completion of RM518 million purchase for 100% of midsized Uni.Asia Life Assurance Bhd (UAL).
The newly-formed joint venture (JV) is via PFI subsidiary, the Prudential Insurance Co of America (PICA), holding 70% of UAL shares with BSN owning the remaining 30%.
The agreement will also see a strategic, long-term bancassurance agreement with BSN to distribute UAL conventional life insurance products through BSN's banking network of 398 branches and Pos Malaysia Bhd (32%-owned by DRB-Hicom Bhd) 1,000 outlets.
"We look forward to working with them to develop more needs-based solutions that help drive greater insurance penetration across BSN's customer base and transform BSN into one of Malaysia's leading conventional bancassurance provider," said PFI's Asia region (excluding Japan) president Jan van den Berg in a statement yesterday.
The statement does not give the name of the new company especially as currently the name "Prudential" is used in Malaysia Bhd and Prudential BSN Takaful Bhd, both subsidiary of Prudential plc, a company incorporated in the UK and not affiliated with PFI that does business as Pramerica in selected countries outside the US.
In an announcement to the exchange yesterday, DRB-Hicom announced the conclusion of the deal where DRB-Hicom owned UAL via its 51% holding in Uni.Asia Capital Sdn Bhs (through its wholly owned subsidiary Gadek (M) Bhd), with United Overseas Bank (M) Bhd holding the other 49% of Uni.Asia Capital.
Though its desire to sell has been known since 2020, DRB-Hicom had first announced to the exchange its desire to sell its insurance arm which also includes Uni.Asia General Insurance Bhd on Aug 15, 2012.
The sales of UAL is expected to pare down further the heavy debt load of DRB-Hicom which had increased due to the loans taken to finance the acquisition of 100% equity interest in Proton Holdings Bhd totalling RM3.02 billion.