UPDATE 2-Sun Life, partner to buy Aviva's Malaysian insurance JV

Thu Jan 17, 2013 2:54pm EST
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* Sun Life, Malaysia state investor to pay $597 million

* Deal seen pricey for Sun Life, but boosts long-term growth

* Deal to Insurer targeting southeast Asia

By Cameron French and Yantoultra Ngui

TORONTO/KUALA LUMPUR, Jan 17 (Reuters) - Sun Life Financial Inc and Malaysian state investor Khazanah will buy Aviva Plc's Malaysian insurance joint venture with lender CIMB Group for 1.8 billion Malaysian ringgit ($597 million) in a deal that will accelerate Sun Life's push into southeast Asia.

Sun Life, Canada's third-largest insurer, has targeted the region for expansion due to its rapid growth, high savings rates, and relative underpenetration of insurance products.

"We see huge opportunity there. There are 600 million people, the economies are growing, there is a growing middle class" in Southeast Asia, Kevin Strain, president of Sun Life Financial Asia, told Reuters.

Britain's Aviva, the world No. 6 insurer, is exiting markets across the world to boost its underperforming share price. Last month, Aviva sold its U.S. business for $1.8 billion. .

Under the terms of the deal, Sun Life and Khazanah Nasional Bhd will buy 49 percent each in CIMB Aviva Assurance Berhad and Islamic insurer CIMB Aviva Takaful Berhad, which together form the joint venture.   Continued...