Malaysia’s Affin Bank has secured the Minister of Finance’s approval to divest its equity stake in insurance joint ventures (JV) to Generali Asia.

Affin plans to sell a 21% stake in AXA Affin Life Insurance (AALI) and approximately 2.95% equity interest in AXA Affin General Insurance (AAGI).

The bank currently owns 51% of the life insurer and 49.95% of the general insurer.

Affin said it will enter a share sale agreement with Generali Asia for its shares in AALI and AAGI, which is subject to remaining signing conditions.

In June 2021, Affin and Generali entered into an implementation agreement for the sale of stake in the insurance JV.

Additionally, Affin has agreed to merge the general insurance business of AAGI and MPI Generali Insurans (MPIG) under AAGI.  

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As part of the merger, AAGI will acquire certain assets and liabilities of MPIG through a business transfer to create an enlarged firm (MergeCo), which is subject to approval from the authorities.

Following the merger, a new firm (Newco) will be set up to hold all the shares in AALI and the combined general insurance business.

The bank will have a 30% stake in Newco, while Generali will be controlling the remaining 70% stake in it.

Affin president & group CEO Datuk Wan Razly Abdullah Bin Wan Ali said: “We are pleased to have obtained BNM’s approval for the AALI and AAGI Disposals.

“We see synergistic growth opportunities for AAGI and AALI with this joint venture with Generali and the ability to enhance our financial solutions and products offerings to our customers through the future bancassurance partnership with Generali.”

This comes as Generali became a majority shareholder in its Indian property & casualty insurance JV.