Tokio Marine mulls buying RHB Insurance assets

By BLOOMBERG / Pic By BLOOMBERG

TOKIO Marine Holdings Inc is considering the purchase of RHB Bank Bhd‘s general insurance business for about RM1.5 billion, according to people familiar with the matter, as it seeks to boost its presence in the Malaysian market.

The price tag would be equivalent to three times the RM500 million book value of the RHB Insurance Bhd’s assets, the people said, requesting anonymity as the talks are confidential.

Tokio Marine may create a holding company to purchase the RHB insurance unit, into which it would inject its own Malaysian operations, the people said.

It would then reduce its stake in the new holding company to 70% — likely via a trade sale or an initial public offering — in order to comply with local rules on foreign ownership, the people added.

Discussions on the purchase are at an early stage and may not necessarily result in a deal, the people said.

Yusuke Nobusawa, a Tokio Marine spokesman, declined to comment beyond saying the firm will consider the details of the RHB purchase in the future.

A representative of RHB Bank didn’t immediately respond to requests for comment.

If the deal goes ahead, Tokio Marine will follow companies such as FWD Group Ltd in purchasing South-East Asian insurance assets.

Last month, FWD agreed to pay 92.7 billion baht (RM12.45 billion) for the life operations of Thailand’s Siam Commercial Bank pcl in its biggest acquisition. Deals targeting South-East Asian financial companies have totalled US$6.9 billion this year, data compiled by Bloomberg show.

RHB Bank has received permission from Malaysia’s central bank to start discussions with Tokio Marine over the sale of its 94.7% stake in the general insurance unit, according to a stock exchange filing last Wednesday.

The approval is valid for six months.

The RHB Bank’s unit is the 10th largest insurer in Malaysia with a 4.4% market share, according to the bank’s 2018 annual report. — Bloomberg