U.S. insurer ACE Ltd. (ACE) has agreed to buy Malaysian non-life insurer Jerneh Insurance Bhd for MYR654 million, the owners of the Malaysian company said in a stock exchange filing Tuesday.
Jerneh Asia Bhd. (6394.KU) and Paramount Corporation Bhd. (1724.KU), which own 80% and 20% of Jerneh Insurance respectively, said in a stock exchange filing that the Finance Ministry has approved the sale to ACE INA International Holdings, a unit of ACE Group.
The companies said further details will be announced after they sign a definitive agreement on the sale.
The planned sale of Jerneh Insurance makes the company the latest in a series of insurers that have recently sought tie-ups with foreign partners as consolidation in the country's crowded insurance industry gathers pace.
Hong Leong Financial Group Bhd. (1082.KU), PacificMas Bhd. (4782.KU) and Pacific & Orient Bhd. (6009.KU) are among major Malaysian insurance companies that have either concluded deals or are in negotiations with foreign partners.
The price tag for Jerneh Insurance valuing it at two times book value is within market expectations, analysts said.
"This transaction provides a good strategic fit and complements our current presence in Malaysia," Evan G. Greenberg, the chairman and chief executive of ACE, said in a separate statement. "The addition of Jerneh Insurance Berhad will be accretive to ACE's earnings and book value per share and will meet our return-on-capital hurdle rate."
-By Benjamin Low, Dow Jones Newswires; 603-2026-1233; email@example.com