Allianz Calls Off Acquisition of Singapore’s Income Insurer

Ending weeks of suspense, the German Insurer Allianz on Monday said that it has withdrawn its pre-conditional voluntary cash general offer, which was announced in July this year, to acquire at least 51% of the shares in Singapore’s Income Insurance for $1.63 billion.

In light of the Singapore Government’s announcement on October 14 and subsequent changes to the Insurance Act, Allianz, through its wholly owned subsidiary Allianz Europe B.V., said that it remains convinced it is the right partner to support Income Insurance’s continued growth and its strategic mission for the benefit of Singapore’s people, but the decision to withdraw its offer at this time underscores Allianz’s financial discipline.

The extensive discussions which Allianz and Income Insurance have had over the last months have further highlighted the shared values between the two groups.

Renate Wagner, Member of the Board of Management of Allianz SE and responsible for the Asia-Pacific region, said that they respect the Singapore Government’s decision but still believe the combination of Allianz and Income Insurance would have resulted in two strong businesses being brought together for the benefit of Income Insurance’s policyholders and a growing portion of Singapore’s customers.

“We regret having to make this decision but we will, without question, carry on supporting the Singapore insurance market’s continued growth and success,” Wagner said.

He also said that with $8.09 billion in total business volume across its property-casualty and life/health retail insurance businesses in 2023, the Asia-Pacific region is a strategically important growth area for Allianz and Singapore as the regional financial services hub of Southeast Asia will continue to remain an important market for Allianz.

“We have full confidence in the future strength and potential of our existing operations across the region, and we look forward to continuing to deliver exceptional value to our customers and partners across Asia-Pacific,” Wagner added.

On its part, Income Insurance said that material information relating to the offer would have been disclosed publicly if it was formally launched. Allianz’s submission of its preliminary business plan to the Monetary Authority of Singapore (containing information relating to the proposed capital reduction) was part of the required process for Allianz to obtain regulatory approvals, which was the pre-condition of the Offer.

In a statement, the Income Insurance said that the preliminary business plan was not subject to approval from the current Board of his company.

“If the offer was formally launched, based on the process stipulated under the Singapore Code on Takeovers and Mergers, all shareholders would have been informed about the details of the offer, including the possibility of a proposed capital reduction, via the composite document. The composite document would have been made public on Income Insurance’s website,” the Singapore insurer said.

Shareholders’ Liquidity Options

There has been a growing demand for a share liquidity option from minority shareholders, which has intensified since Income Insurance’s corporatisation in 2022. The proposed transaction with Allianz would have provided shareholders with the opportunity to fully realise their investment in their shares.

“Understandably, minority shareholders may be disappointed that the offer has been withdrawn by Allianz. Income Insurance will consider exploring other liquidity options for shareholders to unlock the value of their shares. Shareholders can continue to buy and sell their shares on a willing-buyer and willing-seller basis,” the statement said.