Oct 09 2015, (LBO) – Sri Lanka’s Janashakthi Insurance said on Friday it was purchasing a 100 percent stake of AIA General Insurance Lanka, a fully owned subsidiary of AIA Insurance Lanka for 3.2 billion rupees.
The timeline of completion of the proposed acquisition, once required approvals are secured, is expected to be on or before 31st October 2015, the company said in a stock exchange filing.
The acquisition is part of a plan to “grow our general insurance business from incremental to exponential through inorganic and organic growth,” Janashakthi Insurance said.
AIA Insurance Lanka said the proposed divestiture will enable them to fully focus on life insurance in line with a vision to be the pre-eminent life insurance provider in the Asia Pacific region.
“When calculating the 3.2 billion rupees consideration price, the company has taken into account the 2 billion rupees net assets, discounted cash flows and several other things.” MD of Janashakthi, Prakash Schaffter told reporters Friday.
The combined business of the two entities will account for a market share of 17.5 percent, the company said.
All the employees of the AIA general insurance (over 200) are to be acquired by the new entity and the new company is to be listed in the Colombo Stock Exchange before 2018.
Janashakthi general insurance is the third largest general insurer in Sri Lanka with an estimated gross written premium of 7.5 billion rupees and a market share of 11.4 percent.