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KUALA LUMPUR, July 19 -- AmGeneral Holdings Bhd (AGHB), a 51 per cent-owned subsidiary of AMMB Holdings Bhd, has entered into an implementation agreement with Liberty Insurance Bhd (LIB) for the proposed sale of its wholly-owned subsidiary, AmGeneral Insurance Bhd (AGIB) for approximately RM2.29 billion.
In a filing with Bursa Malaysia today, AMMB said the proposed disposal would be satisfied via a combination of cash and shares, which will result in AMMB holding a 30 per cent interest in the LIB and AGIB businesses.
“The proposed disposal is subject to regulatory approvals under which LIB will acquire 100 per cent equity stake in AGIB from AGHB,” it said.
Upon completion of the proposed disposal, it said AMMB and Liberty Mutual Insurance Company, parent company of LIB, would hold 30 per cent and 70 per cent equity stake respectively in LIB and AGIB.
“AMMB will be accounting for the proposed disposal as a disposal of subsidiary and subsequently, will account for the 30 per cent retained interest in LIB and AGIB as an associate undertaking,” it said.
It added that the proposed disposal would also see AMMB group entering into a 20-year new bancassurance partnership.
In a separate statement today, AMMB group chief executive officer Datuk Sulaiman Mohd Tahir said this proposed transaction would set the stage for the group to thrive and compete better, strengthening its positioning in the Malaysian insurance market.
It said the combined entity is expected to become the largest motor insurer and the number two property and casualty insurer in the market.
“The synergies that we will be able to leverage on will benefit our shareholders, customers, employees and all other stakeholders,” he added.
LIB serves the Malaysian insurance market through approximately 450 employees at 24 branch locations nationwide.
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