The Financial Services Authority, or OJK, is expected to manage a merge of general insurance firm Asuransi Multi Artha Guna and Fairfax Insurance Indonesia following plans for the former to be acquired by the other, a senior OJK official said.
Fairfax last month announced it would acquire 80 percent of AMAG shares from Paninvest, in a deal that worth an estimated $165 million. AMAG and Paninvest are part of Panin Group, controlled by Indonesia's Gunawan family operating in financial services, including banking, life insurance and securities.
Fairfax Insurance Indonesia was established through a joint venture between Fairfax Asia Limited and Canada's Fairfax Financial Holdings in 2014. Fairfax Asia owned 80 percent of FII shares, while the remainder is owned by Ang Andi Bintaro, founder of Olympindo Group, a business group which operates multi finance companies across Indonesia.
"They are currently negotiating and will later complete the merge," said Firdaus Djaelani, OJK chief executive in charge of monitoring non-bank financial services.
Under Indonesia's single entity rule, foreign owners of financial institutions are not allowed to control more than one financial institution in the country.
Fairfax earlier expected the deal to be complete by the end of the year. OJK must still approve the deal as well as give its approval on the controller, directors and commissioners in the new entity.
AMAG shares is owned by Paninvest at 55.61 percent, Panin Financial at 16.12 percent, employee's pension funds at 14.03 percent, Bank Panin employees at 7.76 percent and 6.48 percent owned by public.
AMAG booked gross written premium Rp 285 billion in the first quarter last year, more than doubled the Rp 115 billion in the same period last year.
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