American International Assurance Company enters SL with NDB Aviva
View(s):American International Assurance Company Ltd (AIA) signed a deal on Thursday to buy a 92.3 per cent stake in Aviva NDB Insurance for US$ 109 million, from British insurer Aviva and Sri Lanka’s National Development Bank (NDB), officials told the media. This deal was done through Aviva NDB Holdings Lanka (Pvt.) Limited.
“The remaining 7.7 per cent of Aviva NDB Insurance not acquired represents the shares publicly held and traded on the Colombo Stock Exchange and no offer will be made for the remaining shares. Total net consideration payable by AIA with respect to the transaction including the exclusive banc assurance agreement with NDB and the sale of the NDB Aviva Wealth Management Limited stake is US$109 million,” Huynh Thanh Phong, Regional CEO, AIA Group Ltd told reporters
The conclusion of the transaction and the subsequent rebranding and renaming of AVIVA NDB as AIA is subject to necessary legal, statutory and regulatory approvals, Bill Lisle, Executive Vice President and Group Chief Distribution Officer AIA Group said. “This may possibly be the largest insurance sale in the country,” he said.
The acquisition reflects the quality of the Sri Lanka business, operations and management, and its position of strength in the Sri Lankan market. Customers will benefit from the strength, security and certainty associated from being part of the AIA Group, which is the fifth largest insurance company in the world by market capitalization.
“It’s not about sharing a pie, it’s about making it much bigger,” Mr. Phong said.
Aviva NDB will enter into a 20-year bancassurance agreement with NDB, one of Sri Lanka’s largest financial conglomerates with a nationwide bank branch network.
“Sri Lanka has the lowest insured population at 2 per cent and it has a large insurable population which immediately translates into large growth potential,” Mr. Phong added.
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