Bank Rakyat Indonesia revives insurance unit stake sale, attracts bidders

Photo by Bank Rakyat Indonesia

PT Bank Rakyat Indonesia has revived its plan to sell a stake in its life insurance arm, which is attracting interest from suitors in a deal that could fetch about $500 million, according to people familiar with the matter.

FWD Group Ltd., backed by Hong Kong billionaire Richard Li, and BNP Paribas Cardif SA are among potential bidders for a significant minority stake in PT Asuransi BRI Life, the people said. Prudential Plc and Samsung Life Insurance Co. are also weighing offers for the business, said the people, who asked not to be identified as the discussions are private.

A transaction could also involve a so-called bancassurance partnership, which allows an insurer to sell its products through the bank’s branches, the people said. The state-owned lender has requested binding bids as early as next month, although the coronavirus outbreak could delay the process, the people said.

Deliberations are ongoing and the companies could still decide against pursuing a transaction, the people said. Representatives for Bank Rakyat Indonesia, Cardif, FWD, Prudential and Samsung Life declined to comment.

This could be at least the third attempt by Bank Rakyat to sell a stake in the insurer. The lender tried to dispose a 40% stake in BRI Life in 2015. At that time, FWD and BNP Paribas Cardif were already among parties vying for the holding, Bloomberg News had reported. In 2018, Morgan Stanley was hired to advise on the sale only to see process put on ice again last year.

Any transaction would add to the $34 billion of announced deals involving Southeast Asian financial institutions in the past 12 months, data compiled by Bloomberg show. That includes FWD’s $3 billion purchase of the life insurance operations of Thailand’s Siam Commercial Bank Pcl and Bangkok Bank Pcl’s $2.7 billion acquisition of a controlling stake in PT Bank Permata.

Bank Rakyat was founded in 1895 in Purwokerto, Central Java. The country’s oldest lender used to be fully owned by the government until its listing in Jakarta in 2003. The bank had about 1,417 trillion rupiah ($87 billion) in assets in 2019, according to its latest annual report. The lender is seeking to boost its digital presence and allocate financing to unearth promising startups.

Bloomberg

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.