Great Eastern (GE) Holdings is acquiring PT QBE General Insurance Indonesia for US$28 million (S$38.5 million), it announced yesterday.
The transaction is expected to be completed in the first half of next year, subject to approval by Indonesia's financial services authority and the Monetary Authority of Singapore.
GE said in a statement that QBE's history in the Indonesian general insurance market dates back more than 100 years.
Group chief executive Khor Hock Seng said: "The acquisition is part of our broader strategy to build our general insurance operations into a significant business pillar for the Great Eastern Group and to deepen our footprint in Indonesia."
The acquisition will complement the group's existing life insurance presence in Indonesia, he added, noting that Indonesia's non-life insurance penetration rate is among the lowest in the region so the market potential "is tremendous".
The US$28 million cash price for the acquisition was based on QBE's book value as at June 30 with some adjustments and taking into account factors such as the existing assets, its financial position and business prospects, said GE.
The final amount will be based on the book value at completion, with some adjustments.
The acquisition is part of our broader strategy to build our general insurance operations into a significant business pillar for the Great Eastern Group and to deepen our footprint in Indonesia.
GE GROUP CHIEF EXECUTIVE KHOR HOCK SENG
Based on QBE's unaudited financial statements for the half year ended June 30, the book value and net tangible asset value was 452 billion rupiah ($42.5 million).
GE said the transaction is not expected to have a material effect on its net tangible assets or earnings per share for this financial year.
The insurer's shares closed down 1.1 per cent to $25.16 yesterday.