Mitsui Sumitomo-Hong Leong acquisition | US$2bn | ||
Synopsis Mitsui Sumitomo acquires 30% of Hong Leong Assurance and its entire general insurance business | |||
Firm | Client | Role | |
Wong & Partners [lead partner: Brain Chia] | Mitsui Sumitomo Insurance | Counsel to acquirer | |
| Baker & McKenzie Tokyo [lead partner: Hiroshi Kondo] | Mitsui Sumitomo Insurance | Japanese counsel to acquirer | |
Shook Lin & Bok | Hong Leong Assurance | Counsel to target | |
Tier-one Malaysian firms Wong & Partners and Shook Lin & Bok have clinched one of the biggest Malaysian merger & acquisition deals this year – the 30% stake acquisition in Hong Leong Assurance Berhad. The deal makes Mitsui Sumitomo Insurance (MSI) the second largest general insurer in the country.
Baker & McKenzie's Tokyo team also assisted the acquirer with its application to the Malaysian Securities Commission in seeking an exemption from a mandatory general offer in relation to a rights issue by MSIG Malaysia Berhad, a subsidiary of MSI.
The transaction involved the acquisition by MSI Malaysia of the entire general insurance business of HLA (a composite insurer) on a zero net asset basis via a scheme of arrangement. It also involved the acquisition by MSI of 30% of the equity interest in HLA (which has become a life insurer after the divestment of its general insurance business) and the proposed rights issue by MSIG Malaysia, a subsidiary of MSI, to raise gross proceeds of US$42.47m.
According to Wong & Partners lead partner Brian Chia, this is a complicated insurance merger that marks one of the biggest Malaysian M&A transactions for the year. “This deal sets a benchmark for deal valuation in the Malaysian insurance space, with a valuation of over six times the book value,” he said.ALB
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