FWD to Buy Majority Stake in Malaysian Insurer Ahead of Planned IPO
FWD Group Holdings Ltd., the pan-Asian insurance company owned by Hong Kong billionaire Richard Li, has agreed to buy a majority stake in Gibraltar BSN Life Bhd., a move that allows it to tap into the Southeast Asian market’s growth potential ahead of FWD’s planned initial public offering.
FWD, along with a group of investors, will buy a 70% stake in Gibraltar BSN from a subsidiary of New York-listed Prudential Financial Inc., according to a statement on Monday. The transaction will allow FWD to make a foray into the Malaysian life insurance market. Bank Simpanan Nasional Bhd. will continue to hold the remaining 30%.
The buyers paid less than $25 million for the majority stake in Gibraltar BSN, according to people familiar with the matter. A representative for FWD declined to comment, while Prudential Financial didn’t immediately respond to an emailed query.
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The transaction is expected to close in the second quarter. FWD plans to partner with Bank Simpanan to further develop and grow Gibraltar BSN. FWD entered Malaysia in 2019 as a provider of takaful products, including term life, critical illness, hospital cash benefit and medical protection. Malaysia is the fourth-largest life insurance market by premium in Southeast Asia, according to the statement.
“We’re creating a full-service offering in Malaysia and will be able to offer both family takaful and life insurance solutions in a rapidly growing market with huge long-term potential for growth,” Huynh Thanh Phong, Group Chief Executive Officer and Executive Director of FWD, said in the statement. “With these strategic developments, we also substantially complete our footprint across key Southeast Asia markets in the 10th anniversary year for FWD Group.”
The move in Malaysia follows FWD’s long-term strategy to expand across Southeast Asia. The company continues to work towards an IPO in Hong Kong this year, Bloomberg News has reported. It could seek to raise about $1 billion from the IPO, people familiar with the matter have said.
The insurer’s value of new business rose 24.6% year over year to $405 million in the first half of 2022, on a constant exchange rate basis, the company said in September. While FWD reported an adjusted loss of $333 million for the six months ended June 30, its operating profit before tax jumped about 111% to $200 million from the same period in 2021.
Photograph: A digital billboard advertising FWD Group Holdings Ltd. atop a building in Hong Kong, China, on Saturday, Oct. 15, 2022. Photo credit: Lam Yik/Bloomberg