Sanlam to buy 51% in Malaysian insurer

South Africa's biggest insurer already has a short-term insurance business in Malaysia.

South Africa's biggest insurer already has a short-term insurance business in Malaysia. Picture: Supplied.

JOHANNESBURG - South Africa's biggest insurer, Sanlam, said on Wednesday it would buy a majority stake in Malaysia's MCIS Zurich Insurance Berhad for about $119 million, further expanding its presence in the southeast Asian nation.

Sanlam said it would initially buy a 40 percent from a major shareholder, Koperasi MCIS Berhad, and another 11 percent through an offer to minority shareholders.

Koperasi will part with bigger chunk should minority shareholders decline whatever bid Sanlam places on the table.

After the R1,25 billion purchase, MCIS Zurich will have to dispose of its short-term insurance business as Malaysian regulations do not allow an investor to operate more than one life or general insurance license.

Sanlam already has a short-term insurance business in Malaysia after acquiring a 49 percent share in Pacific & Orient Insurance Co. in 2013.

MCIS Zurich, which has both life and general insurance operations and 3,400 agents serving its 26 branches, posted a 49 percent increase in earnings per share in the six months to end-December 2013.

Sanlam, which also has operations in India and 15 African countries, has a war chest of more than $370 million for acquisitions in emerging markets this year.

Sanlam shares were relatively unchanged, slipping just 0,11 percent lower to R55,15 at 0922GMT, compared with a 0,3 percent rise by Johannesburg's Top-40 index.