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Siam Commercial considering sale of insurance arm: Reuters
Posted on Thursday, 20 April 2017 06:05
Thailand-based lender Siam Commercial Bank is weighing a sale of its insurance arm to Hong Kong-headquartered FWD Group in a deal that could be worth around USD 3.00 billion, people with knowledge of the matter told Reuters.

According to the sources, the two businesses are in exclusive talks, which they entered into last month.

A final decision is likely to be made at the end of May, three people told Reuters, adding if the discussions fall apart then Siam Commercial may consider a sale of SCB Life Assurance to another suitor.

The disposal of the group’s insurance arm would be the largest of Thailand-based business since March 2016, according to Zephyr, the M&A database published by Bureau van Dijk.

BJC Supercenter and Saowanee Holdings acquired a majority stake in hypermarket operator Big C Supercenter for EUR 3.10 billion (USD 3.31 billion at current exchange rates) last year.

Zephyr shows Siam Commercial’s divestment would be the fourth largest deal on record for the country behind the 64.3 per cent sale of cash and carry trade centres operator Siam Makro (USD 3.92 billion) and the acquisition of a 72.0 per cent stake in Bank of Ayudhya (USD 5.31 billion).

Reuters observed that the Southeast Asian insurance market has become increasing popular for foreign investors, which are attracted to the fast growth rates and lower penetration levels in the region.

SCB Life Assurance is billed as one of the top protection firms in Thailand with THB 173.33 billion (USD 5.03 billion) in total assets and THB 48.17 billion in net premium reserves in 2014, according to its website.

A report by Reuters in 2014 suggested Siam Commercial was considering a sale of a 25.0 per cent stake in the insurer; although no further details regarding this potential deal emerged.

© Zephus Ltd