Thailand’s largest lender by assets, Siam Commercial Bank Pcl (SCB), is selling its life assurance business to Hong Kong-based insurer FWD Group for 92.7 billion baht (2.39 billion pounds), marking the largest insurance M&A deal in Southeast Asia.
“Under this arrangement, SCB will distribute FWD‘s life insurance products to the bank’s customers in Thailand, leveraging the bank’s distribution channels for a period of 15 years,” both companies said in a joint statement on Monday.
“SCB will receive a total deal amount of 92.7 billion baht along with additional payments common in bancassurance transactions over the course of the bancassurance partnership,” the statement said.
The companies revived talks in March, two years after they failed to reach a deal over disagreements on valuation, Reuters has reported.
Southeast Asia has emerged as a battleground for foreign insurers who are attracted by the region’s lower insurance penetration levels and faster growth rates for life insurance premiums than in their home markets.
FWD, owned by tycoon Richard Li, has aggressively expanded its Asian footprint in recent years, mainly through acquisitions.
The latest deal comes days after FWD agreed to buy the Hong Kong operations of U.S. insurer MetLife Inc.