KUALA LUMPUR: Employees Provident Fund (EPF) and Retirement Fund Inc (KWAP) are said to have held talks with Singapore-based insurer Great Eastern Holdings to buy a minority stake in the latter’s Malaysian insurance unit.
According to Wall Street Journal (WSJ), citing sources, the deal between EPF and the foreign-owned insurance firm could fetch as much as US$1 billion.
“Negotiations are in early stages, with no certainty of a transaction. Great Eastern could look to list its insurance unit through an initial public offering in Malaysia if no deal is reached,” the people familiar with the matter told WSJ.
Even if the deal fails through, they added that EPF can still opt to partake in the potential listing of Great Eastern Life, albeit with a lower stake.
The people familiar said such share sales through IPO could raise almost US$3 billion, WSJ said in its report.
News reports said Bank Negara Malaysia had given foreign insurers until end of June this year to reduce their stakes in local firms to 70 per cent.
KWAP chief executive officer Datuk Wan Kamaruzaman Wan Ahmad recently told NST Business that it was another step closer to acquiring foreign-owned insurance firms this year, expecting its deal with Prudential Plc to materialise first.
“We are currently talking to two parties including Prudential and Great Eastern Holdings Ltd. Most likely, the deal with Prudential will materialise. We are hopeful,” he said.
Bloomberg reported last year, quoting sources, that Prudential, Singapore’s Great Eastern and Japan’s Tokio Marine Holdings Inc are among companies pursuing plans to cut stakes in their Malaysian units.