PacificMas Terminates Acquisition Talks With Tokio Marine Asia

Copyright 2010 A.M. Best Company, Inc.All Rights Reserved BestWire

July 29, 2010 Thursday 09:56 AM EST

381 words

PacificMas Terminates Acquisition Talks With Tokio Marine Asia

Rebecca Ng

KUALA LUMPUR, Malaysia

Malaysia-based investment holding group PacificMas Berhad has decided to terminate discussion on the sale of its wholly owned general insurance subsidiary, Pacific Insurance Berhad, with Tokio Marine Asia Pte. Ltd.

The potential sale of Pacific Insurance had reflected a change in the business strategy of its investment parent, because general insurance is the core business of Malaysia-listed PacificMas, according to Pacific Insurance.

A spokesman at PacificMas declined to comment on the termination of the talks and whether there were disagreements on the transaction price. He also declined to comment on the future business development of Pacific Insurance.

He also declined to say if PacificMas will continue to seek other buyers for its insurance business.

PacificMas informed Tokio Marine Asia of its intention to discontinue the negotiations on the proposed sale of its 100% stake in Pacific Insurance on July 26, said the company in a statement filed with the Malaysian stock exchange Bursa Malaysia Securities.

In June, the central bank of Malaysia, Bank Negara Malaysia, approved PacificMas to commence preliminary negotiations with Tokio Marine Asia to dispose of its entire equity interest in Pacific Insurance. Both PacificMas and Tokio Marine Asia would have been required to obtain approval from the Ministry of Finance, with the recommendation of the central bank for the transaction, said PacificMas.

Singapore-based Tokio Marine Asia, a subsidiary of Japan-based Tokio Marine Holdings Inc, was established in March 1992. It has 15 group companies, including 11 nonlife insurers, three life insurers and one reinsurer across 10 Asian countries, with operations in Indonesia, Singapore, Malaysia, Thailand, India, the Philippines, Vietnam, Taiwan, Hong Kong and Australasia.

Another Singapore-based financial services group, Great Eastern Holdings, the parent of Great Eastern Life Assurance Co. Ltd., also won an approval from Bank Negara Malaysia to start negotiations with PacificMas to acquire all the issued and paid-up share capital of Pacific Insurance (BestWire, April 26, 2010).

Pacific Insurance became a wholly owned subsidiary of PacificMas in 1995. It provides general and medical insurance in Malaysia.

(By Rebecca Ng, Hong Kong news editor: [email protected])

July 30, 2010

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