German insurer Allianz's plan to acquire a majority stake in Singapore's Income Insurance has been halted after the revelation of a $1.85 billion cash return to shareholders within three years. The government swiftly passed new laws to prevent the deal, citing concerns over the structure and transparency of the transaction.
SINGAPORE - A plan for German insurer Allianz to buy a majority stake in Singapore ’s Income Insurance went awry when a key piece of information belatedly came to light. Allianz ’s plan to return $1.85 billion in cash to shareholders within three years after the transaction in a capital reduction exercise proved to be a sticking point, prompting the Government to urgently pass new laws on Oct 16 to halt the deal. Allianz would have taken a stake of least 51 per cent in Income.
NTUC Enterprise would have seen its stake in Income shaved from 72.8 per cent to between 21.8 per cent and 49 per cent, depending on how minority shareholders tender their shares. The changes to the Insurance Act allow the minister in charge of the Monetary Authority of Singapore to withhold approval in cases that involve an insurer that is a cooperative or is linked to one. Income used to be a cooperative before it changed its legal structure to a company in 2022, and parent NTUC Enterprise is a cooperative.NTUC Enterprise, in turn, is set up by the National Trades Union Congress (NTUC), the Singapore Labour Foundation and their affiliated unions.Industry experts who spoke to The Straits Times also questioned the role of those involved in the deal.NTUC deputy secretary-general Desmond Tan said on Oct 16 that the labour movement’s central committee did not know of the insurers’ plan to return $1.85 billion to shareholders before it was made known in Parliament on Oct 14. He was responding to questions posed by backbenchers including Progress Singapore Party’s Non-Constituency MP Leong Mun Wai and Nominated MP Raj Joshua Thomas. Mr Leong had asked about when NTUC’s leaders were briefed on the offer. “If the NTUC central committee did not know the full details, then why did NE (NTUC Enterprise) and Income not brief them on the full details of the transaction?” Mr Thomas pointed out that NTUC’s secretary-general Ng Chee Meng and president
Allianz Income Insurance Singapore Deal Cash Return
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