German insurer Allianz has announced it is withdrawing its offer to acquire a majority stake in Income Insurance after the Singapore government raised concerns about the proposed transaction. The initial deal would have seen Allianz acquiring a 51 per cent stake in Income for about S$2.2 billion (US$1.6 billion). The Singapore government intervened, expressing their concerns about the impact of the acquisition on Income’s social mission.
Minister Edwin Tong remarked, “The deal in its current form would not be in the public interest.” However, Allianz expressed a willingness to revise the deal, maintaining that it remained “the right partner to support Income Insurance’s continued growth.”
Allianz stated, “Allianz remains convinced it is the right partner to support Income Insurance’s continued growth and its strategic mission for the benefit of Singapore’s people, but the decision to withdraw its offer at this time underscores Allianz’s financial discipline.”
Allianz’s board member, Renate Wagner, expressed respect for the Singapore government’s decision, saying, “We still believe the combination of Allianz and Income Insurance would result in two strong businesses being brought together for the benefit of Income Insurance’s policyholders and a growing portion of Singapore’s customers.”
NTUC Enterprise, the parent company of Income, mentioned that the search for a strategic partner for Income Insurance aimed to enhance the company’s financial resilience. They acknowledged Allianz’s decision and stated, “While Income Insurance’s capital adequacy ratio is currently at a healthy level, NTUC Enterprise recognises the need to be prepared for a more turbulent and volatile world.”
NTUC Enterprise added, “If the COVID-19 pandemic had been prolonged, and more capital had been needed, NTUC Enterprise alone may not have been able to meet Income Insurance’s further financial needs. That was the key reason for considering an additional strategic partner for Income Insurance.”
Prime Minister Wong also voiced his opinion on the matter, stating, “The government’s intervention in this deal was necessary to safeguard the integrity and stability of Singapore’s financial sector. We prioritize the interests of policyholders and the broader financial ecosystem in these decision-making processes.”
Moving forward, NTUC Enterprise mentioned that they will take the time to study how to address the government’s concerns and consider strategic options to strengthen Income Insurance’s financial resilience.
