Khazanah eyeing RM3.2b control of Hong Leong Financial Group

Bank Negara expressed “no objections” last month to Hong Leong having talks with “certain parties” on the sale of its stakes in two companies.

KUALA LUMPUR: Khazanah Nasional Bhd, the sovereign wealth fund, is reportedly considering a RM3.2 billion bid for control of billionaire Quek Leng Chan’s Hong Leong Financial Group, according to Bloomberg News.

Quek, chairman of Hong Leong Financial, is Malaysia’s fifth richest person with a net worth of USD4.3 billion, according to the Bloomberg Billionaires Index.

Khazanah, which had net asset value of RM109 billion in investments at the end of December, may take Hong Leong Financial’s 70 per cent stake in Hong Leong Assurance Bhd and its 65 per cent stake in Hong Leong MSIG Takaful Bhd, according to sources. Japan’s Mitsui Sumitomo Insurance Co bought 30 per cent of Hong Leong Assurance in 2010. The next year, it bought 35 per cent of Hong Leong MISG.

Bank Negara expressed “no objections” last month to Hong Leong having talks with “certain parties” on the sale of its stakes in the two companies, according to Hong Leong Financial.

Khazanah declined to comment, said Bloomberg. Hong Leong Financial CEO Tan Kong Khoon didn’t immediately respond to a call seeking comments.

Mitsui Sumitomo aside, Khazanah and Sun Life Financial Inc. bought control of an insurance venture between Aviva Plc and CIMB Group Holdings Bhd in 2013 for RM1.8 billion.

In the same year, Khazanah agreed to purchase 90 per cent of Turkish insurer Acibadem Saglik ve Hayat Sigorta AS for USD252 million.

If Khazanah goes ahead with its reported deal with Hong Leong, said Bloomberg, it would add to the USD10.3 billion worth of insurance acquisitions in Southeast Asia in the past five years. Khazanah, which has stakes in banks, power producers and wireless operators, said in 2014 that it was seeking more insurance investments in Asia.

Last month, Canadian investment firm Fairfax Financial Holdings Ltd said it will buy 80 per cent of Indonesian group PT Paninvest’s non-life insurance unit for USD161 million. Fairfax is led by Prem Watsa.

FWD Group of Hong Kong, led by billionaire Richard Li, said in June that will take over the Vietnamese insurance unit of Great Eastern Holdings Ltd for USD35.7 million.