CIMB-Aviva joint venture may fetch $ 1.2 b

The sale of CIMB Group and British insurer Aviva Plc’s Malaysian insurance JV could fetch up to US$ 1.2 billion, say various local media reports. The deal would be the second largest transaction in Malaysia after ING’s sale of its local life unit to AIA recently for US$ 1.68 billion.

CIMB’s 51% controlling stake and Aviva’s 49% stake is said to be worth US$ 500 million each. Aviva’s stake would cost another US$ 200 million as it includes a potential strategic alliance agreement between the winning bidder and CIMB on top of the stake sales. The strategic alliance will allow the winner to distribute bancassurance products through CIMB Group’s subsidiaries across the region. The JV partners sell life insurance and Takaful products through CIMB-Aviva Assurance and CIMB Aviva Takaful. CIMB Group operates in nine out of 10 ASEAN nations – Malaysia, Indonesia, Thailand, Singapore, the Philippines, Cambodia, Brunei, Vietnam and Myanmar. CIMB wants to raise its overseas revenue contribution to 60% by 2015, and selling insurance products would expand its retail-based fee income substantially.

Manulife is most likely to win the bid, according to industry sources. Other suitors that have shown interest are Sun Life, Prudential, AIA, and Khazanah Nasional, which made a late bid.