AIA Group has agreed to acquire ING’s insurance subsidiaries in Malaysia for a cash consideration of €1.34bn (US$1.73bn).

The sale of ING’s operations in Malaysia includes its life insurance business, its employee benefits business and its 60% stake in ING Public Takaful Ehsan Berhad, which is a joint venture with Public Bank Berhad, Malaysia’s third-largest bank, and Public Islamic Bank Berhad,

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If the deal is approved, AIA said the acquisition will be immediately accretive to its earnings and will make AIA the number one ranked insurance provider by total premiums in the high-growth Malaysian market.

Commenting on the acquisition, Mark Tucker, AIA’s group chief executive and president, said: "This is a compelling and unique opportunity for AIA to further enhance our ability to sustain high-quality growth in the fastest growing insurance region in the world and in one of the most attractive markets in the region."

Jan Hommen, CEO of ING Group said: the agreement between ING and AIA Group was the first major step in the disinvestment of its Asian insurance and investment management businesses and shows that ING continues to make "steady progress" in the restructuring of the company.

The acquisition is subject to regulatory approvals in Malaysia and the Netherlands and the transaction is expected to close in Q1 2013.

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AIA Group said the ING Malaysia acquisition will be funded through an efficient combination of internal cash resources and external debt financing that will retain AIA’s existing strong financial position.

AIA’s agreement with ING follows its recent agreement to acquire a 92.3% stake in Sri Lankan insurer Aviva NDB Insurance.