Global insurer ACE Group pays Bt6.15bn for Thai company
January 13, 2014 00:00 By The Nation 3,327 Viewed
Siam Commercial Bank will fetch Bt6.15 billion from the selling of its 60.86 per cent stake in Siam Commercial Samaggi Insurance (SCSMG).
The selling price, as agreed by global insurance giant ACE Group, was agreed at Bt27.60 per share, representing a premium of about 17.9 per cent on the closing market price of SCSMG shares at January 10, 2014.
SCB said in a statement that the transaction as contemplated by the agreement will likely be completed in the second quarter, 2014 and will be subject to certain conditions, such as, obtaining relevant regulatory approvals, completion and satisfaction of due diligence by ACE and approval of this divestment by SCB’s board of directors and shareholders. On closing of this transaction, in compliance with Thai regulations, ACE will make a mandatory tender offer for the remaining 39.14 per cent of shares in SCSMG that is currently held by other shareholders.
“SCSMG is a highly regarded general insurer in Thailand,” said SCB Executive Chairman Vichit Suraphongchai. "For the next level of business growth at SCSMG, we believe that an experienced global non-life insurer is better positioned to enhance the competitiveness and market positioning of SCSMG, while SCB will continue to distribute SCSMG’s products. The divestment to ACE was the result of an extensive search to find an appropriate buyer who will enhance the competitiveness of SCSMG and serve as an effective partner to SCB as it builds-up its non-life bancassurance business”.
Established in 1947 and listed on the Stock Exchange of Thailand, SCSMG is a major underwriter of general insurance products in Thailand, particularly in the auto, commercial and personal accident segments. It distributes its products mainly through SCB’s branch network, independent brokers and its channels and branches. In 2012, SCSMG reported approximately Bt4.3 billion in gross premiums written.
After the sale, SCB will continue to distribute SCSMG’s products through SCB’s nationwide branch network under the terms to be agreed upon.