By Yantoultra Ngui
SINGAPORE (Reuters) – German insurer Allianz has withdrawn its offer to acquire at least 51% of Singapore’s Income Insurance for about $1.63 billion, the company said in a statement on Monday.
Reuters reported on Dec. 13 that the insurer had scrapped the proposed acquisition.
Allianz, which unveiled its offer in July, said in Monday’s statement the decision followed a government announcement in parliament on Oct. 14 and subsequent changes to the Insurance Act.
The acquisition would have lifted Allianz to fourth largest composite insurer in Asia from ninth, but sparked criticism in Singapore because of concerns that it would detract from a mission to provide affordable insurance for lower-income workers.
Singapore Prime Minister Lawrence Wong said in October the city-state would block Allianz’s bid, but remained open to a new deal if its concerns could be addressed, which Allianz said at the time it would try to do.
The government subsequently amended the insurance law, giving it more power to scrutinise buyouts of insurers linked to co-operatives.
“We respect the Singapore government’s decision,” said Renate Wagner, a member of Allianz’s management board responsible for the Asia-Pacific region.
“We still believe the combination of Allianz and Income Insurance would result in two strong businesses being brought together for the benefit of Income Insurance’s policyholders and a growing portion of Singapore’s customers.”
Asia-Pacific is a strategically important growth area for Allianz and Singapore, as the financial services hub of Southeast Asia, will stay an important market for the company, it said.
For years Allianz has been making incremental pushes into Asia, with its investment division expanding in China in June.
Last year, China’s securities regulator gave approval for Allianz Global Investors to set up an onshore fund management company.
In a separate statement, Income Insurance said it was committed to offering inclusive and affordable products for the more vulnerable in society.
Set up in 1970 as a co-operative to provide affordable insurance to Singapore workers, Income Insurance is seen as a national icon, its websites showed.
It ranks among Singapore’s four systemically important insurers, the central bank said in 2023.
“The proposed transaction would have provided shareholders with the opportunity to fully realise their investment,” Income Insurance said, adding that minority shareholders’ demand for a share liquidity option has grown since 2022.
“Income Insurance will consider exploring other liquidity options for shareholders to unlock the value of their shares,” it added.
(Reporting by Yantoultra Ngui; Editing by Muralikumar Anantharaman and Clarence Fernandez)
