Sumitomo Life Insurance Company, a Japanese insurer, has agreed to acquire a 35.5% stake in Singapore Life Holdings (Singlife) from TPG Inc. The deal is valued at S$1.6 bn, which is equivalent to approximately US$1.21 bn.
That would value Singlife at S$4.6 bn, making it one of the largest insurance deals in Southeast Asia.
This acquisition is part of Sumitomo Life’s strategy to expand its footprint in Southeast Asia. In addition to buying out TPG’s stake, Sumitomo Life also plans to make an offer to the remaining shareholders of Singlife, indicating its intention to take full control of the company
The transactions are expected to be completed in the first quarter of 2024 and are subject to regulatory approvals in Japan and Singapore.
The deal comes months after Sumitomo bought UK-based Aviva PLC’s stake in Singlife.
Sumitomo Life, which had first invested in Singlife in 2019, sees Singapore as a key part of its Southeast Asia strategy and expects the deal to strengthen the earnings of its international business portfolio
Singlife, which serves as the exclusive insurance provider for the city-state’s Ministry of Defence, Ministry of Home Affairs, and Public Officers Group Insurance Scheme, had total assets of S$14.4 bn at the end of 2022.
Sumitomo Life last month raised its stake in Singlife to 27% from 23.2% through the purchase of S$180 mn worth of new shares.
The Osaka-based firm also expressed its intention to establish a local office in Singapore in April to improve its relation with Singlife and diversify its presence in the country.
Sumitomo Life will increase earnings contribution from its overseas business which can strengthen its business sustainability
Texas-based TPG is an alternative asset management giant with around $212 bn in assets under management, according to data from its website.
Since its foundation in 1907, Sumitomo Life has served its role in supporting numerous customers and their families through its life insurance business.
The advent of the super-aging society in which a 100-year lifespan is well within the bounds of possibility is spurring diversification of customer needs for life insurance.Yukinori Takada, President & Chief Executive Officer Sumitomo Life Insurance Company
In order to meet these diverse needs, in addition to insurance providing death protection, medical and nursing care insurance, products ensuring financial security in old age, and other products, we launched SUMITOMO LIFE Vitality Shared-Value Insurance in 2018. This product not only provides risk coverage but also supports customers’ efforts to enhance health so as to reduce risk.
Furthermore, from the viewpoint of offering the optimum insurance precisely responding to the needs of each customer, we are emphasizing consulting and services that embody unique human value while making the best use of digital technology.
Along with these initiatives, we are also taking steps to further reinforce the financial base so as to more firmly support customers, addressing diverse sales channels beginning with bancassurance, and strengthening the revenue base through new growth strategies such as business expansion into overseas markets and promotion of new businesses.