KUALA LUMPUR (Aug 3): Malayan Banking Bhd (KL:MAYBANK) is acquiring the remaining 30.95% stake in Etiqa's holding company, Maybank Ageas Holdings Bhd, from Belgian insurer Ageas SA for RM4.83 billion, giving Malaysia's largest lender full ownership of its insurance and takaful business. 

In a statement on Monday, Maybank said it had signed an implementation agreement with Ageas Insurance International NV to acquire the remaining stake in its 69.05%-owned subsidiary, Maybank Ageas. 

Maybank Ageas is the holding company for Etiqa's operations in Malaysia and Singapore, offering life and general insurance as well as family and general takaful products through multiple distribution channels.

The RM4.83 billion price tag, adjusted for an RM800 million dividend to be paid by Maybank Ageas on the completion date, values the company at 1.98 times its book value and 15.3 times its earnings. Ageas will get RM248 million, while Maybank will receive RM552 million from the dividend.

The acquisition will be funded through a combination of internal funds and external financing, the bank said. 

Maybank president and group chief executive officer Datuk Seri Khairussaleh Ramli said in a statement the acquisition marks the start of the next phase of the group's ROAR30 strategy by strengthening its investment in Etiqa — the world's fourth-largest takaful provider — to drive regional growth, and expand customer penetration regionally while delivering value to shareholders. 

“This transaction represents an important milestone for Maybank in charting its insurance and takaful business’ next growth phase across Southeast Asia. We will also continue to invest in innovations and leverage digital capabilities to improve productivity, reduce operating costs, and deliver better customer experience. New and existing customers will also have access to an expanded suite of solutions including enhanced product offerings. This is part of our strengthened commitment to improving accessibility and making insurance and takaful protection easier to be obtained by all consumers,” he said. 

Full ownership of Maybank Ageas would support Maybank's long-term value creation strategy, said Khairussaleh. He also thanked Ageas for its contribution to building the Etiqa franchise over the past 25 years. 

The acquisition is underpinned by four strategic objectives: strengthening Etiqa's position as Malaysia's national insurance and takaful champion through deeper customer penetration; accelerating regional expansion under its ROAR30 strategy; enhancing long-term earnings, return on equity and shareholder value; and improving capital management efficiency to support sustainable dividend payouts.

The proposed acquisition is subject to approval from Bank Negara Malaysia. Maybank said it has submitted the necessary application, together with the implementation agreement and the agreed form of the share sale and purchase agreement.

Maybank Investment Bank Bhd and Morgan Stanley Asia (Singapore) Pte Ltd are acting as financial adviser and international financial adviser, respectively, for the transaction.

Shares of Maybank were unchanged at RM10.90 at Monday’s noon break, giving it a market capitalisation of RM131.84 billion.