P&O said to get nod to talk to Prudential

Malaysia’s central bank has given the nod for Prudential Holdings Ltd (P&O) to begin talks to buy a stake in insurer Pacific & Orient, a source with direct knowledge of the deal said on today.

Prudential Holdings, a subsidiary of Prudential PLC, is the latest foreign insurer keen to enter Malaysia’s growing insurance market.

“Pacific & Orient received the approval by fax (Wednesday) yesterday morning, but there have been no discussions about a price yet,” the source said, asking not to be identified as the approval had not been made public.

Pacific & Orient shares were up 17 per cent to RM1.24 by 0847 GMT.

Pacific & Orient declined to comment while Prudential’s Malaysian officials were not immediately available.

Pacific & Orient had said this month it asked the central bank for approval to begin preliminary talks for the potential divestment of an equity interest in Pacific & Orient Insurance to Prudential.

The news follows Malaysia’s Hong Leong Financial Group announcement n June it would merge its non-life insurance business with Japan’s Mitsui Sumitomo Insurance Co and sell a stake in its life business in deals worth about US$480 million.

Analysts have said Prudential may be changing its approach to penetrating the Asian market after its failed bid for AIG’s Asian unit.

Prudential now holds a composite license in Malaysia that covers both the life and general insurance businesses. - Bernama