22 May 2013
South African financial services provider Sanlam has acquired a 49% stake in Malaysian short-term insurer Pacific & Orient Insurance Co. Berhard (POI) worth about R814-million.
“This transaction is our first foray into the southeast Asia region,” Sanlam Emerging Markets chief executive officer, Heinie Werth, said in a statement on Monday.
It forms part of Sanlam’s strategy to pursue growth opportunities in selected emerging markets.
“We believe that this transaction will provide us with a platform to gain an understanding of the region and a footprint on which to expand.”
POI was established in 1972 and is fully owned by Pacific & Orient Berhad. Its focus is motorcycle insurance; it is the largest motorcycle insurer in Malaysia, with a 40% market share in the sector.
“We believe there is a good cultural fit between POI and Sanlam, which will facilitate our focus on strengthening our relationship to drive business growth and establish a mutually beneficial and sustainable partnership,” Werth said.
Sanlam also believes that the Malaysian business environment, where the regulator is encouraging international partnerships for local companies, is conducive to growth.
“POI is an established entity with a robust business model and a strong market position,” he said. “We are confident that the company offers us a relatively low risk entry into the market and a platform for growth.
“We look forward to the partnership with Sanlam and the technical expertise that they will add in exploring future growth opportunities,” said POI’s managing director, Chan Thye Seng.