Malaysian banking group AMMB Holdings is selling off its stake in AmGeneral Insurance to the local unit of Boston-based Liberty Mutual Insurance Co. for 2.29 billion ringgit (US$542 million) in cash and equity.
AmGeneral Holdings, a 51%-owned unit of AMMB, currently holds 100% of AmGeneral Insurance.
The deal will result in Liberty Mutual holding 70% in both AmGeneral Insurance and Liberty Insurance Malaysia, while AMMB will hold the balance 30%, according to the banking group.
“AmGeneral Insurance and Liberty Insurance Malaysia’s operations will subsequently be formally merged,” AMMB says in a statement on July 19.
It says the merger will create Malaysia’s largest motor insurer and second largest property and casualty insurer, with an estimated proforma premium base of 2.3 billion ringgit in 2022.
As part of the deal, the merged entity will enter into an exclusive 20-year new bancassuanrce partnership with AMMB to distribute general insurance products.
AmGeneral Insurance is currently one of the top three motor insurers in Malaysia, with 1,400 employees, 33 branches and 6,000 agents. Liberty Insurance Malaysia is much smaller, with about 450 employees, 24 branches and 2,000 agents.
AMMB did not indicate when the deal, which has to be approved by regulators, is expected to be completed, saying only that more information will be announced in “due course”.