Insurance giant AIA enters SL
To acquire 92.3 % stake of Aviva NDB:
AIA Group Limited (AIA or the Group) has agreed to acquire a 92.3 %
stake in Sri Lankan insurer, Aviva NDB Insurance, through Aviva NDB
Holdings Lanka (Pvt.) Limited from British insurer Aviva and Sri Lanka’s
National Development Bank (NDB).
In addition, Aviva NDB will enter into a 20 year bancassurance
agreement with NDB, one of Sri Lanka’s largest financial conglomerates
with a nationwide bank branch network. AIA has also agreed to sell to
NDB the 83.9 percent stake in NDB Aviva Wealth Management Limited (NAWM)
which will be acquired by NDB Group as part of the proposed transaction.
Shah Rouf, Managing Director, AVIVA NDB |
Mark Tucker, Group Chief Executive & President, AIA Group |
The remaining 7.7 percent of Aviva NDB Insurance not acquired
represents the shares publicly held and traded on the Colombo Stock
Exchange of Sri Lanka (CSE) and no offer will be made for the remaining
shares. Total net consideration payable by AIA with respect to the
transaction, including the exclusive bancassurance agreement with NDB
and the sale of the NAWM stake is US $ 109 million
The acquisition reflects the quality of the Sri Lanka business,
operations and management and its position of strength in the Sri Lankan
market. Customers will benefit from the strength, security and certainty
associated from being part of the AIA Group, which is the fifth largest
insurance company in the world by market capitalization. The conclusion
of the transaction and the subsequent re-branding and renaming of AVIVA
NDB as AIA is subject to necessary legal, statutory and regulatory
approvals.
Mark Tucker, AIA’s Group Chief Executive and President, said, “We are
delighted to be entering Sri Lanka, a country with a compelling
combination of strong economic growth prospects and low existing levels
of insurance penetration.
“This acquisition will immediately establish AIA as the second
largest life insurance company in Sri Lanka. Aviva NDB Insurance, with
its experienced management team, high quality employees and agents and
an attractive long-term bancassurance relationship, represents an
excellent platform from which to participate and grow in the highly
attractive Sri Lankan market.”
“We look forward to playing a leading role in the development of Sri
Lanka’s insurance sector as we meet the long-term savings and protection
needs of increasing numbers of Sri Lankan individuals and families.”
Shah Rouf, Managing Director of AVIVA NDB Insurance said, “Our
Company has progressively been getting stronger, to the point where we
are now the second largest life insurer in Sri Lanka. Becoming part of
AIA is a fulfillment of our own vision to be the premier insurance
company in Sri Lanka.”
Simon Machell, Chief Executive of Higher Growth Markets, Aviva Group
commented, “The sale price reflects the relative success and growth of
the AVIVA NDB business. We take great pride in having developed a robust
market leading insurer that will continue to play an important role in
the emerging Sri Lankan economy.”
CEO of NDB Group, Russell de Mel stated, “We are very pleased to have
been part of the growth of AVIVA NDB Insurance and the entry of the
insurance giant AIA will further strengthen the company. Insurance, the
third pillar of the NDB Group, will continue to exist through an even
stronger alliance in bancassurance that we will have with AIA. This
transaction also gives an opportunity for the NDB Group to further
strengthen its strategic alliances within the financial services sector
whilst enhancing and releasing core capital; a prerequisite to boost
organic and inorganic growth of the NDB Group. It is a timely
opportunity to become a significant national and regional player in the
financial sector and contribute further to the growth of Sri Lanka.”
Established in 1987, Aviva NDB Insurance has a composite insurance
license and is Sri Lanka’s second largest life insurer with 800
employees and a high-quality tied agency force of 3,100 agents. In the
year ended 31 December 2011, Aviva NDB Insurance recorded gross written
premiums of US$ 81 million with life premiums accounting for
approximately 75 per cent and non-life premiums 25 per cent of the total
premiums.
AIA Group Limited and its subsidiaries (collectively “AIA” or “the
Group”) comprise the largest independent publicly listed pan-Asian life
insurance group. It has wholly-owned main operating subsidiaries or
branches in 14 markets in Asia Pacific – Hong Kong, Thailand, Singapore,
Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan,
Vietnam, New Zealand, Macau and Brunei and a 26 per cent joint venture
shareholding in India. |