Sri Ayudhya Capital will hold a shareholders meeting on Friday for a vote on for the proposed M&A deal between Sri Ayudhya General Insurance Public Company Limited (SAGI) and Allianz Insurance Public Company Limited (AYUD).
The proposal had been reported to the Stock Exchange of Thailand (SET) on November 13.
"This merger plan is believed to help elevate SAGI from its current No 19 market position to No 12, securing its long-term development with an expanded customer base and scale while strongly positioning it to benefit from future P&C market growth, which grew at a CAGR of 9 per cent between 2007 and 2016," Sri Ayudhya Capital said
"In addition, it will bring about a significant value creation potential and reduced risks, presenting clear operational efficiencies, more diversified portfolio and reduced capital intensity; translates into potentially higher shareholder returns. And the most importantly, the improved management and capabilities will certainly enhance its competitiveness to be able to compete strongly in Thailand through leveraging Allianz's insurance expertise and digital capabilities."
Veraphan Teepsuwan, chairman of Sri Ayudhya Capital Public Company Limited, said that AYUD has established a strong partnership with Allianz Group for more than 15 years.
"Throughout many years of success, we have been convinced that Allianz Group is committed to developing and strongly growing its business in Thailand," Veraphan said. "In addition, the group has successfully implemented effective strategies to increase value to its shareholders. This is clear from the investment value of AYUD in Allianz Ayudhya Assurance in the past. AYUD's 14.35 per cent stake investment in AZAY in 2012 has increased in value by 274 per cent.
"Therefore, we are very confident that this transaction and the additional investment in Allianz Ayudhya Assurance will create significant business benefits and add value to our shareholders."
Virojn Srethapramotaya, director of Sri Ayudhya Capital Public Company Limited, said: "The combination of Sri Ayudhya General Insurance Public Company Limited and Allianz General Insurance will result in an operation with expanded scale and competitiveness. This will combine Sri Ayudhya General Insurance's core strengths with Allianz General Insurance's insurance expertise.
"We expect this transaction to significantly strengthen our capabilities and expand the products and services we can deliver to our customers. In addition, this transaction will also leverage Allianz's Group capabilities in digital and data science to drive innovation and closer relationships with our customers. In terms of business size, the combined business will have a far broader customer base with increased competitiveness, putting us in a leading position to achieve stronger growth in Thailand's insurance market."