(Bloomberg) — FWD Group Holdings Ltd., the pan-Asian insurance company owned by Hong Kong billionaire Richard Li, has agreed to take a controlling interest in Gibraltar BSN Life Bhd. to acquire, a move that allows it to unlock the Southeast Asia growth potential of the market ahead of FWD’s planned IPO.
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FWD, along with a group of investors, will buy a 70 percent stake in Gibraltar BSN from a subsidiary of New York-listed Prudential Financial Inc., according to a statement Monday. The transaction will enable FWD to enter the Malaysian life insurance market. Bank Simpanan National Bhd. will continue to hold the remaining 30%.
Financial terms of the transaction, which is expected to close in the second quarter, were not disclosed. FWD plans to partner with Bank Simpanan to further develop and expand Gibraltar BSN. FWD entered Malaysia in 2019 as a provider of takaful products including long-term life insurance, critical illness, hospital allowance and medical protection. According to the statement, Malaysia is the fourth largest life insurance market by premium in Southeast Asia.
“We are creating a full-service offering in Malaysia and can offer both family takaful and life insurance solutions in a fast-growing market with tremendous long-term growth potential,” Huynh Thanh Phong, Group Chief Executive Officer and Executive Director of FWD, said in the Explanation. “With these strategic developments, we are also completing our presence in the most important Southeast Asian markets in the year of the 10th anniversary of the FWD Group.”
The move to Malaysia follows FWD’s long-term strategy to expand across Southeast Asia. The company is still working toward a Hong Kong IPO later this year, Bloomberg News reported. It could seek to raise about $1 billion from the IPO, people familiar with the matter said.
The insurer’s new business value rose 24.6% year over year to $405 million in the first half of 2022 on a constant currency basis, the company said in September. While FWD reported an adjusted loss of $333 million for the six months ended June 30, its pretax operating income increased approximately 111% to $200 million over the same period in 2021.
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