CIMB Group Holdings Bhd has entered into a conditional sale and purchase agreement to divest its 51% stake in Indonesian insurer PT CIMB Sun Life in a cash deal worth approximately 550 billion rupiah (RM169mil).
In a statement on Wednesday, the banking group said that its 51% stake in CIMB Sun Life would be acquired directly and indirectly by Sun Life Assurance Company of Canada. In a filing with Bursa Malaysia, CIMB Group said further announcements on the proposed transaction would be made at an appropriate time.
CIMB Group’s equity interest in CIMB Sun Life is held via CIG Bhd with a 47.24% stake and PT Bank CIMB Niaga Tbk with a 3.76% stake. CIMB Group and Sun Life have been bancassurance partners in Indonesia and Malaysia since 2009 and 2013 respectively, underscoring the long-standing collaboration between the two parties
The stake disposal is subject to regulatory approvals and customary closing conditions, the group said. CIMB’s group chief executive Tengku Datuk Seri Zafrul Aziz commented that the divestment was part of its ‘T18’ strategy to recalibrate and strengthen core businesses.
“This move will enable us to streamline our insurance portfolio by exiting the non-core business of manufacturing insurance products and focus on our distribution capabilities to better serve our clients. Bancassurance remains a core component of our wealth management proposition and we look forward to strengthening our regional partnership with Sun Life,” he said.
According to CIMB Niaga’s president director and chief executive officer Tigor M. Siahan, the Indonesian partnership is synergistic as it allows the group to offer quality products to clients while also bolstering Sun Life’s distribution capabilities by leveraging CIMB Niaga’s vast network of 618 branches across Indonesia.
“Existing and new CIMB Niaga customers will continue to have access to the same comprehensive range of wealth management and life insurance solutions that they enjoy today,” he assured.
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