Siam Commercial Bank (SCB), Thailand's largest lender by assets, has agreed to sell its life insurance business to Hong Kong-based FWD Group Financial Services for $3bn in Southeast Asia's biggest insurance M&A deal.
Under the agreement, SCB will distribute FWD's life insurance products to the its customers in Thailand, leveraging the bank's distribution channels for a period of 15 years.
SCB's chief executive Arthid Nanthawithaya said during the signing ceremony in Bangkok that the deal is worth 92.7 billion baht ($3bn), which makes it the biggest ever acquisition in Southeast Asia's insurance sector. The partnership look to combine SCB's large customer base and distribution network with FWD's innovative product propositions and strong digital capabilities.
It's not easy to find the right partner that ticks all the right boxes, but finally we have found one"
Vichit Suraphongchai, SCB's chairman, said the bank, which has 16m customers in a country of 69m, had been searching for a long-term insurance partner that could help take its business "to the next level". "It's not easy to find the right partner that ticks all the right boxes, but finally we have found one," Vichit said.
Huynh Thanh Phong, group chief executive of FWD Group, said the SCB-FWD combination "will provide SCB's growing customer base with access to FWD's market-leading and innovative product suite".FWD is owned by Richard Li, the son of Li Ka-shing, Hong Kong's wealthiest man.
With its sights set on becoming a leading pan-Asian insurer, FWD announced it had entered into an agreement to acquire the Hong Kong operations of MetLife from the US insurer on June 28.
Commenting on the purchase, Phong said: "MetLife Hong Kong is highly complementary to our existing business and the acquisition is another step towards fulfilling our ambition to build a leading pan-Asian life insurance platform. The acquisition signifies our confidence in the long-term growth potential of Hong Kong."
The deal comes days after FWD agreed to buy the Hong Kong operations of US insurer MetLife Inc.
SCB Life and FWD are ranked fifth and eighth, respectively, or 14% combined in terms of market share of total premiums in Thailand, according to data from Thai Life Assurance Association for the first quarter of 2019.
Sources told Reuters in October that FWD was working on a stockmarket listing, plans for which were likely to be formulated over the next two years.