Mergera & Acquisitions in Insurance

8/9/2019 Mergera & Acquisitions in Insurance

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Outlin

e Insurance

Merger, Acquisition,

Takeover & Amalgamation M&A In Insurance

Recent M&A in Insurance

Insurance M&A scenario inIndia


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Insurance

Insurance is pooling of risks. Insurance, whether life or non-life, providespeople with a reasonable degree of security and

assurance that they will be protected in theevent of a calamity or failure of any sort.


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Merger And Acquisition

Merger -Merger - Combination of two ormore companies into a singlecompany where one survives and

the others lose their corporateexistence ..

AcquisitionAcquisition - Also- Alsoknown as a takeover, isknown as a takeover, is

the buying of onethe buying of one

company (the target) bycompany (the target) by

another.another.


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Difference

Merger Acquisition

Two firms are combined

on a relatively co-equalbasis Parent stocks are usuallyParent stocks are usuallyretired and new stockretired and new stockissuedissued

Name may be theName may be theoriginal or a combinationoriginal or a combination

One of the partners takeOne of the partners takeover the dominantover the dominantmanagementmanagement

One firm buys another

firm Can be by means ofCan be by means of

controlling share, acontrolling share, amajority, or all of themajority, or all of thetarget firms stocktarget firms stock

Can be friendly or hostileCan be friendly or hostile

Usually done through aUsually done through atender offertender offer


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Modes of Mergers &

Acquisitions


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M & A inInsurance

USA and UK lead the list of countries that feature amongthe top in terms of insurance mergers and acquisitions.

Other countries with mergers and acquisitions in theinsurance sector include Netherlands, France, Italy, Germany,

Japan, Switzerland, Canada, Australia, Belgium, Spain andSweden.

Grown since early 1990s.

Mainly due to opening of

financial sectors and economicreforms.

Both within border and crossborder mergers.


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CountryNumber of

M&AValue

( in million dollars)

USA 606 210167

UK 217 67586

Germany 91 19870

Italy 82 19912

Spain 73 3116

France 64 24551

Canada 62 9700

Netherlands 58 25440Australia 48 4778

J apan 47 17807

Belgium 30 3739

Switzerland 21 11451

Sweden 14 2806

TOTAL 1413 420922

Comparative Figures inInsurance M & A during theperiod 1990 -2003


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AIG agrees to $35.5 billion unit

sale to Prudential

American International Group Inc agreed to a $35.5 billionsale of its Asian life insurance unit to Britain's Prudential Plc onMarch 1,2010.

Prudential pays about $25 billion in cash and the rest inequity, the sources said.

It would be one of the largest overseas deals to date for aBritish firm and make Prudential one of the biggest

insurers in Southeast Asia.

"This transaction offers the opportunity to bring together twoleading companies, positioning the combined group to capturethe future growth opportunity in Asia," Prudential said in thestatement.


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AIG selling ALICO to MetLife for $15.5

billion

MetLife said Monday that it would pay AIG$6.8 billion in cash and about $8.7 billion inequity for the American Life Insurance Co.unit.

ALICO sells life, accident and healthinsurance as well as retirement and wealthmanagement products in more than 50

countries.

The deal will help MetLife, to diversifyrevenue sources by product, distribution andgeography.


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Insurance M&A

scenario in India

Insurance sector likely to witness

consolidation.

IRDA is in the process of finalizing guidelinesfor mergers and acquisitions in the insurancespace.

It will help companies to fund their expansionplans to tap the huge potential for insuranceproducts in the country.


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Documents

Mergera & Acquisitions in Insurance