Mitsui to pay RM940m for 30pc of HLeong unit

Malaysia’s Hong Leong Financial Group is to merge its non-life insurance business with Japan’s Mitsui Sumitomo Insurance Co and sell a stake in its life business.

Under the terms of the deal announced today, the Malaysian financial group will get a 30 per cent stake in the merged business, according to a joint statement from the firms.

It will also sell 30 per cent of its assurance business to the Japanese company for RM940 million (US$289 million).

Two sources familiar with the details of the transaction told Reuters earlier that the deal was worth some RM1.6 billion.

“This is a way for Mitsui to get into the life insurance business so it can compete with Tokio Marine,” one of the sources who had direct knowledge of the deal said.

Mitsui Sumitomo does not have a licence to sell life insurance in Malaysia whereas competitor Tokio Marine does, he said.

The Japanese company has long sought to expand its overseas businesses, targeting fast-growing emerging markets. Malaysia’s economy has rebounded strongly from last year’s recession and grew 10.1 per cent in the first quarter of this year from a year ago, its fastest pace in 10 years. -- Reuters