23 March 2016
Divestment will allow the Group to focus on its core business while continuing to build its partnership with Sun Life to distribute insurance products through its extensive branch network in Indonesia
Kuala Lumpur: CIMB Group Holdings Berhad (“CIMB Group”), through its subsidiaries, has entered into a Conditional Sale and Purchase of Agreement to divest its 51% stake in PT CIMB Sun Life (“CIMB Sun Life”), an Indonesian life insurance company, for a total cash consideration of IDR550 billion (equivalent to approximately MYR169 million)1.
CIMB Group’s 51% equity interest in CIMB Sun Life is held via CIG Berhad (47.24%) and PT Bank CIMB Niaga Tbk (“CIMB Niaga”) (3.76%). The divestment will take the form of a sale of shares held by CIMB Group, which will be acquired directly and indirectly by Sun Life Assurance Company of Canada (“Sun Life”).
CIMB Group and Sun Life have been bancassurance partners in Indonesia and Malaysia since 2009 and 2013 respectively, underscoring the longstanding collaboration between the two parties.
“This divestment is another step towards business consolidation and resource optimisation in line with our recalibration strategies to achieve our T182 aspirations. This move will enable us to streamline our insurance portfolio by exiting the non-core business of manufacturing insurance products and focus on our distribution capabilities to better serve our clients. Bancassurance remains a core component of our wealth management proposition and we look forward to strengthening our regional partnership with Sun Life,” said Tengku Dato’ Sri Zafrul Aziz, Group Chief Executive, CIMB Group.
“CIMB Niaga's bancassurance alliance with Sun Life is synergistic as it allows us to continue to offer quality bancassurance products to our clients and at the same time, it bolsters Sun Life’s distribution capabilities by leveraging CIMB Niaga’s vast network of 6183 branches across Indonesia to reach out to our ever-growing customer base. Existing and new CIMB Niaga customers will continue to have access to the same comprehensive range of wealth management and life insurance solutions that they enjoy today,” added Tigor M. Siahaan, President Director and CEO, CIMB Niaga.
The disposal of CIMB Group’s stake is subject to regulatory approvals and customary closing conditions.
1 An exchange rate of Malaysian Ringgit (“MYR”) 0.000307: Indonesian Rupiah (“IDR”) 1 being the middle rate prevailing on 22 March 2016 as published by Bank Negara Malaysia.
2 T18 is CIMB Group’s mid-term strategy to recalibrate and strengthen its core businesses, with the aim of improving the Group’s position as the region’s leading ASEAN universal bank
3 As at 31 December 2015