Allianz axes deal with Income Insurance after public scrutiny

Move comes 2 months after Govt blocked union over deal structure, social concerns

- Claire Huang

Allianz's planned union with Income Insurance has fallen through, five months after the German insurer made an offer to buy a controlling stake in the home-grown outfit.

The German insurer on Dec 16 said in a statement that it would withdraw its July 17 offer to acquire a 51 per cent stake in Income, in a deal valued at $2.2 billion.

The decision comes two months after the Government on Oct 14 called off the much-debated union over the deal structure and Income's ability to continue its social mission.

Two days later on Oct 16, Parliament passed a Bill to amend the Insurance Act so that the Monetary Authority of Singapore (MAS) would have to consider the views of the Ministry of Culture, Community and Youth when an application for regulatory approval involves an insurer that is either a cooperative or linked to one.

"Allianz remains convinced it is the right partner to support Income Insurance's continued growth and its strategic mission for the benefit of Singapore's people, but the decision to withdraw its offer at the time underscores Allianz's financial discipline," the German insurer said.

Ms Renate Wagner, a member of the board of Allianz SE who is responsible for the Asia-Pacific region, said: "We respect the Singapore Government's decision."

She added that the group still believes the combination of Allianz and Income would result in two strong businesses being brought together for the benefit of Income's policyholders and a growing portion of Singapore customers.