Japanese insurer Tokio Marine has suspended the sale of its $1 billion Southeast Asian life insurance business, in part because of a dispute with a Malaysian partner over an expiring product distribution deal, four sources familiar with the matter said.
The Tokyo-listed company hired Goldman Sachs and Jefferies last year to work on the sale, which includes Tokio Marine’s life insurance businesses in Indonesia, Malaysia, Singapore and Thailand, Reuters reported in June 2023.
The sale attracted interest from Japanese and Middle Eastern buyers, the first source said.
But last month, Tokio Marine filed a lawsuit against RHB in Malaysia to assert its right of first refusal over a 10-year product distribution agreement that expires at the end of the year, when I showed a document filed by RHB at the time.
Tokio Marine also asked RHB for details of the final offer RHB agreed to receive from other parties for a new agreement and requested a temporary injunction to prevent RHB from concluding an agreement with other parties, according to the filing.
Given the ongoing litigation, the buyers were unable to make offers that met Tokio Marine’s valuation expectations, the first and second sources said.
Some buyers had separately offered to buy only part of Tokio Marine’s life insurance business in Southeast Asia, but the insurer insisted on selling them as a whole, these two sources said.
All sources declined to be named as the matter is private.
In response to Reuters’ query, Tokio Marine confirmed it is pursuing a Malaysian bank, but declined to provide details or comment on any impact on the sale of its Southeast Asian life insurance business.
Goldman Sachs and Jefferies declined to comment. RHB did not immediately respond to a request for comment.
The pause sale comes as Tokio Marine has overhauled its operations to boost profitability.
The Tokyo company sold Tokio Marine Highland’s US construction division to Intact Insurance Group in August 2022, according to the announcement at the time.
Founded in 1879, Tokio Marine was Japan’s first non-life insurance company. It has since expanded into life insurance and is now present in 46 countries outside of Japan, according to its website.
International operations contribute 75% of its profits and Japan 25%, according to its website.
Tokio Marine shares are up 61.1% year-to-date, giving it a market capitalization of $75.1 billion as of Friday, according to LSEG data.
($1 = 149.8800 yen)
