The Singapore government plans to stop a proposed deal by Allianz SE to buy a majority stake in a homegrown insurance firm, three months after the transaction sparked a backlash from the public.
The government assessed the proposal and decided it wouldn’t be “in the public interest” for the Income Insurance Ltd. deal to proceed in its current form, Minister of Culture, Community and Youth Edwin Tong told parliament on Monday. Tong said the government isn’t satisfied that Income can fulfil its social mission as a co-operative after the acquisition.
“We are nonetheless open to any new arrangement which Income may wish to pursue, whether with Allianz or any other partners, so long as the concerns highlighted are fully addressed,” he said.
Allianz and Income Insurance didn’t immediately respond to requests for comments on the latest development.
In July, the German company said it planned to buy at least 51% of Income from NTUC Enterprise Co-operative Ltd. to strengthen its presence in Asia. The proposed $2.2 billion transaction drew criticism after it was announced.
Monetary Authority of Singapore board member Chee Hong Tat said in Parliament in August that the fostering of a competitive insurance market with financially strong insurers was a key part of the regulator’s approach to ensure that insurers operate sustainably and serve the public well.
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Tong said on Monday that the government’s move doesn’t mean Singapore is closing its doors on foreign investment. For Income, he said it makes sense for the firm to look into a partnership with a strong party with a global presence and strong networks. “Don’t read into this as suggesting that we’re not open to a foreign entity partnering with Income, or indeed, whether it’s Allianz, or indeed, any other entity,” he said.
Follow The Edge Singapore’s coverage of Allianz and Income Insurance:
- May 23: Singapore’s Income Insurance considering partnerships or stake sale
- June 14: Income Insurance and Allianz hold 'transaction' talks, latest possible Singapore insurance M&A
- July 17: Allianz offers $40.58 per Income share, representing premium of 37.3% over NAV
- July 25: NTUC Enterprise says it remains ‘fully committed’ to Income Insurance in clarification statement
- July 30: NTUC Enterprise issues further clarification statement, stresses its commitment to Income Insurance
- Aug 3: Income Insurance: open letter, global backdrop, redeemable and irredeemable shares
- Aug 4: NTUC Enterprise explains the difference between redeemable and irredeemable shares to former CEO
- Aug 5: Former NTUC Income and NTUC Enterprise CEO rebuts NTUC Enterprise’s points
- Aug 6: Income-Allianz deal saga: From a minority shareholder’s perspective
- Aug 8: Questions on Income-Allianz deal tabled in Parliament
