UNITED States insurer Liberty Mutual will be applying for regulatory approval to acquire Malaysia's AmGeneral Insurance Bhd (AmGeneral).
AmGeneral is currently 51 per cent owned by AmBank Group and 49 per cent owned by Insurance Australia Group (IAG).
Subject to receiving appropriate regulatory approvals, Boston-based Liberty Mutual said its Malaysian unit Liberty Insurance Berhad would acquire a 100 per cent stake in AmGeneral.
AmBank Group's share of the sale proceeds would be in the form of cash and consideration shares, Liberty Mutual added.
"This will result in AmBank Group holding a 30 per cent interest in the Liberty Insurance and AmGeneral businesses.
"The AmGeneral and Liberty Insurance operations will, at a subsequent date, be formally merged," it said.
Liberty Mutual said it was expected that the combined entity would become the largest motor insurer and second-largest general insurer in Malaysia based on last year's data.
As part of the transaction, it said the prospective merged entity would enter into an exclusive 20-year bancassurance partnership with AmBank Group to distribute general insurance products.
Matt Nickerson, Liberty Mutual's president and chief operating officer (Global Retail Markets, East Region and Asia), said expanding and investing in international insurance markets was instrumental in the company's aspiration to become a leading global property and casualty insurance company.
He said Liberty Mutual's mission to help people "embrace today and confidently pursue tomorrow" was well aligned with AmBank Group's mission to help individuals and businesses grow and win together.
"Combining Liberty's global capabilities with AmGeneral's leading market share in motor and growing business in additional product lines will create a best-in-class insurance operation," he said.
AmGeneral serves the Malaysian insurance market through 33 branch locations and a workforce of 1,400 employees.
A top three motor insurer with a growing business in additional product lines, the company distributes its personal and commercial insurance products under the AmAssurance and Kurnia brands through more than 6,000 agents, brokers, car dealers, franchises and affinity partners, as well as its fast-growing digital and direct capabilities.
Citigroup Inc acted as a financial advisor to Liberty Mutual in the transaction.