Insurance provider IAG (ASX:IAG)
has commenced the sales process to divest its interest in their Malaysian venture, AmGeneral Holdings, the general insurance arm of AmBank Group for a deal that could be valued at $340 million.
The Sydney-based insurer holds a 49 per cent interest in the Malaysian business and is looking to dispose of its portion to the owner of the remaining 51 per cent, Liberty Insurance conditional on approval from the country’s central bank and Minister of Finance.
Australian’s largest insurer expects an approximate $90 million dent to their balance sheet which will be recognised in the FY21 results now that the asset is officially held-for-sale. The sale is expected to see an increase in the insurance juggernaut's regulatory capital position of approximately $150 million at completion.
The general insurer has been reviewing its Asian operations over the past four years, selling off their Thailand and Indonesian operations in 2019. The company joins other Australian providers like CBA, who are reducing their exposure in Asia to focus on their local front.
Shares in Insurance Australia Group (ASX:IAG)
closed 2.03 per cent lower at $4.83 yesterday.