Allianz, AYUD forge swap deal
Allianz and SET-listed Sri Ayudhya Capital Plc (AYUD) have entered into agreements worth a combined 5.15 billion baht to swap Allianz Ayudhya Assurance (AZAY) for AYUD’s shares and let AYUD’s wholly owned subsidiary, Sri Ayudhya General Insurance (SAGI), acquire the entire stake in Allianz General Insurance (AZTH).
The share swap and acquisition deals are aimed at creating synergy for the insurers and winning a larger slice of the Thai insurance market.
To facilitate the deals, AYUD will raise capital by issuing 96.5 million shares, of which 73 million worth 3.9 billion baht will be offered to Allianz and CPRN Thailand (CPRNT) for a 11.8% stake in AZAY.
CPRNT is an affiliate of Allianz, which directly and indirectly owns companies which in turn hold a 30% stake in CPRNT.
The remaining 23.5 million shares will be sold to CPRNT for 1.25 billion baht, at a price of 53.43 baht, according to yesterday’s filing with the Stock Exchange of Thailand.
Proceeds arising from the newly issued share sales to CPRNT will be used to buy newly issued shares of SAGI, which in turn will be used to acquire AZTH.
Last year, SAGI’s premiums amounted to 3.05 billion baht, while AZTH had premiums of 2.39 billion. In terms of market share, SAGI controlled 1.44% and AZTH had 1.39%.
Upon the deal’s completion, Allianz, together with CPRNT, will become the largest shareholders in AYUD — the insurance holding firm — with a 40% stake, while AYUD’s shareholding in AYAZ will be raised to 32%.
Allianz now owns a 16.8% stake in AYUD.
Allianz SE and CPRNT will seek a waiver on the requirement to make a tender offer for the remaining shares of AYUD from the Securities and Exchange Commission. Moreover, the entire business in AZTH will be transferred to SAGI and operated as a single entity, Allianz said in a separate statement.
Both deals are subject to the relevant regulatory and shareholder approval, and these transactions are expected to complete in 2018, Allianz said.
“The transaction brings together two complementary general insurance businesses with an expanded customer base, service capabilities and distribution channels,” it said. “The enhanced scale and competitiveness will create a key insurance player in Thailand’s fast-growing general insurance market.”
After the transaction, AYUD will be renamed Allianz Ayudhya Capital Plc and its shares will continue to trade on the SET under the ticker symbol AYUD.
AYUD’s third-quarter net profit fell to 120 million baht from 140 million in the same period a year earlier.
AYUD shares closed yesterday on the SET at 39 baht, up nine baht, in trade worth 48.4 million baht.