Khazanah, Sun Life in talks over $750 million Malaysian insurance deal: sources

Tue Jul 19, 2016 3:22am EDT
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By Praveen Menon and Saeed Azhar

KUALA LUMPUR/SINGAPORE (Reuters) - Canada's Sun Life Financial Inc (SLF.TO: Quote) and Malaysian sovereign wealth fund Khazanah Nasional [KHAZA.UL] are in talks to buy the insurance business of Hong Leong Financial Group Bhd (HLCB.KL: Quote), two banking sources said on Tuesday.

The deal, valued by the sources at about 3 billion ringgit ($752.26 million), would allow the Canadian firm to expand further into growing Asian markets while Khazanah would get a strong foothold in the insurance business.

Khazanah and Sun Life are considering making a joint offer for Hong Leong's 70 percent stake in Hong Leong Assurance Berhad and its 65 percent stake in Islamic insurer Hong Leong MSIG Takaful Berhad, the sources said.

The remaining stakes in both companies are held by Japan's Mitsui Sumitomo Insurance Co.

Hong Leong Financial Group, which is controlled by Malaysian billionaire Quek Leng Chan, said earlier this month that it had received approvals from the central bank to start negotiating stake sales in its insurance businesses. The firm has six months to complete the negotiations.

The discussions with Sun Life and Khazanah were in the early stages, one of the sources said. The sources declined to be identified because the discussions were private.

Khazanah and Sun Life declined to comment.

Hong Leong spokeswoman Dau Ming Seling said there were "no definitive developments at this stage" and only initial talks with potential buyers whom she declined to name.   Continued...

The logo of Sun Life Financial is seen in Toronto May 6, 2015.  REUTERS/Fred Thornhill