Prudential Financial, Inc. and Bank Simpanan Nasional reach agreement to purchase Uni.Asia Life Assurance Berhad
International life insurance leader will enter market through new joint venture to help meet increasing insurance needs across Malaysia
KUALA LUMPUR, Malaysia & NEWARK, N.J.--(BUSINESS WIRE)-- Prudential Financial, Inc., which does business as Pramerica in selected countries outside the U.S., and Bank Simpanan Nasional ("BSN") today announced they have reached agreement for Prudential's U.S. insurance company, The Prudential Insurance Company of America ("PICA"), and BSN to purchase 100 percent of Uni.Asia Life Assurance Berhad's ("UAL") issued and paid-up ordinary share capital ("UAL Shares") from Uni.Asia Capital Sdn Bhd ("UAC"). UAC is a joint venture company 51 percent and 49 percent owned by DRB-HICOM Berhad's wholly owned subsidiary Gadek (Malaysia) Berhad and United Overseas Bank (Malaysia) Bhd, respectively. PICA and BSN have submitted a request for approval of the proposed transaction to Bank Negara Malaysia, the life insurance regulator in Malaysia. Under the proposed transaction terms, PICA and BSN will pay total cash consideration of Malaysian Ringgit (RM) 518 million (approximately $160 million) for the UAL Shares. Through a newly formed joint venture, PICA would hold 70 percent of the UAL Shares, and BSN would hold the remaining 30 percent of the UAL Shares. The proposed acquisition is expected to close by the end of 2013.
Upon and subject to the completion of the proposed transaction, UAL will sign a strategic, long-term bancassurance agreement with BSN to distribute its conventional life insurance products through BSN's banking network in Malaysia. BSN is one of Malaysia's largest banks with 397 branches, 3,593 Registered Banking Agents (Ejen Bank Berdaftar (EBB)) 8.22 million customers, and total assets in excess of RM 26.82 billion, as of March 2013. UAL also has a strategic distribution alliance for conventional life insurance products with Pos Malaysia Berhad ("POS Malaysia"), the exclusive provider of mail services in Malaysia. POS has an extensive retail network of more than 1,000 physical outlets nationwide.
UAL is a mid-sized life insurer in Malaysia with a stable and scalable platform, as well as branches in major towns across the country. The company primarily distributes its products through agencies serving affluent and emerging affluent individuals and families, as well as through Bancassurance and Posassurance serving the mass market.
"Malaysia is a very attractive market, with long-term growth potential, low life insurance penetration and a well-developed regulatory environment," said Timothy Feige, senior vice president and International Insurance group executive for Prudential. "This transaction is aligned with our strategy to build upon our success in Japan, Korea and Taiwan, and expand our footprint in the growth markets of Asia through our regional office in Singapore, led by Jan van den Berg."
Jan van den Berg, president of Prudential's Asia region (excluding Japan), said, "In BSN, we have found a strong partner with an excellent reputation, a broad distribution platform and valuable insight into the local market. We are excited to join with them to acquire UAL, a strong company with a proud history, a well-respected management team and a growing customer base."
"This is an important investment for BSN in an industry and market that offer strong potential for growth," said Datuk Adinan Maning, Chief Executive Officer of BSN. "We are pleased with the opportunity to partner with a global leader in life insurance and an emerging company in Malaysia's growing insurance industry. The combination of our respective expertise has the potential to give UAL a unique advantage in the marketplace."
In addition to leveraging the branch and point-of-sale networks of UAL's distribution partners, Prudential and BSN will, upon and subject to the completion of the proposed transaction, work together with UAL to develop a high-quality agency sales force based on Prudential's highly successful Life Planner® model focused on needs-based selling, and explore alternative channels to help meet the insurance needs of customers in the urban and semi-urban centers and rural areas of Malaysia. By drawing on UAL's strengths and combining them with Prudential's global capabilities in insurance and retirement, and BSN's local distribution network and knowledge, UAL will be able to broaden its range of products to deliver even more value to customers across Malaysia.
About Prudential Financial, Inc. (PFI)
Prudential Financial, Inc. (NYS: PRU) is a financial services leader with more than $1 trillion of assets under management as of June 30, 2013, and operations in the United States, Asia, Europe, and Latin America. Leveraging its heritage of life insurance and asset management expertise, Prudential is focused on helping individual and institutional customers grow and protect their wealth. In the U.S., the company's Rock symbol is an icon of strength, stability, expertise and innovation that has stood the test of time. Prudential's businesses offer a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, investment management, and real estate services. Prudential and its subsidiaries, including PICA, are not affiliated in any manner with Prudential plc, a company incorporated in the United Kingdom.
Pramerica is a trade name used by PFI and its affiliates in selected countries outside the United States. For more information about PFI, please visit http://www.prudential.com.
About Bank Simpanan Nasional (BSN)
BSN, a statutory body under the Ministry of Finance, was established on December 1, 1974. Since its inception, all the duties and responsibilities under the Post Office Savings Bank were taken over by BSN. The bank's mission is to encourage savings, investment and smart financial management among Malaysians to improve the well-being and quality of life. BSN has more than 6,000 employees, 397 branches, 982 automated teller machines (ATMs), 255 cash deposit machines (CDM) across the country and 3,593 Registered Banking Agents (Ejen Bank Berdaftar (EBB)), as of March 2013, across the country. BSN has over 8 million customers across Malaysia with retail deposits amounting to RM 10.4 billion.
BSN has undertaken major initiatives through the process of transformation to ensure it remains competitive. It will continue to improve services and expand its range of products to customers. BSN's products includes Personal Loans, Home Loans, Micro Finance Loans, Premium Saving Certificates, Islamic Banking Scheme, Giro Savings Accounts, Debit Card BSNMatrix and BSN Matrix-i MEPS, VISA and Mastercard credit cards. BSN also provides financial planning services that include medical, insurance and will writing. For more information about BSN, visit the website at www.mybsn.com.my.
Photos/Multimedia Gallery Available:http://www.businesswire.com/multimedia/home/20130815005468/en/
Prudential Financial, Inc.
Scot Hoffman, +1 973-802-2824
Vice President, Global Communications
Bank Simpanan Nasional (BSN)
Puspa Marina Dato' Haji Omar, + 603 2162 3222 ext. 3001
Naib Presiden Kanan / Ketua Komunikasi Strategik
KEYWORDS: United States Malaysia Asia Pacific North America New Jersey
The article Prudential Financial, Inc. and Bank Simpanan Nasional reach agreement to purchase Uni.Asia Life Assurance Berhad originally appeared on Fool.com.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.