Siam Commercial Bank To Buy New York Life’s Stake In Life Insurance Joint Venture

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BANGKOK, February 17, 2011 Siam Commercial Bank Public Company Limited (“SCB”) and New York Life Insurance Company jointly announced today that they have signed a definitive agreement under which SCB will acquire all of New York Life’s and its Thai affiliate’s ownership stake in Siam Commercial New York Life Insurance Public Company Limited (“SCNYL”) for Thai Baht 8.4 billion (approximately $274 million) or about Baht 266.89 per share. The transaction is subject to customary closing conditions, including regulatory and SCB shareholder approval, and is expected to close in March, 2011. Formed by the partners in 2000, SCNYL is a joint venture among SCB, which owns 47.33%, and New York Life International, a subsidiary of New York Life that owns a 23.89% stake, and New York Life’s Thai affiliate, which owns a 23.44% interest. The remaining 5.34% of SCNYL is owned by public shareholders and, after the acquisition, SCB will own a 94.66% stake.

SCNYL, a market leader with over Baht 24 billion ($790 million) in net premium written revenue in 2010, generated impressive growth over the past 11 years and grew faster than the industry over that time period.

Khun Kannikar Chalitaporn, President of SCB, stated, “We thank New York Life for its many contributions as we worked together over the last 11 years to build a highly competitive life insurance operation in Thailand committed to serving the people of Thailand. SCB views life insurance as an important component of our long-term strategy that complements our banking franchise, and we see enormous opportunity in the Thailand life insurance sector. We plan to continue the operation’s superior growth while building on its reputation for financial strength and operational and service excellence. As always, SCB remains committed to providing exceptional service levels and enduring value to nearly 12 million customers nationwide.”

Dick Mucci, Chairman and Chief Executive Officer of New York Life International, LLC said, “Today, the joint venture operation with Siam Commercial Bank produces the majority of its sales through the bank distribution channel, and SCB is very interested in fully integrating the operation into its consumer banking platform, as it has done with all of their other bank operations. Given SCB’s strategic focus and business model, both partners believe that the time has now come for SCB to take control of the business and for New York Life to divest our stake.”

Mucci concluded, “New York Life is proud of the important role that SCNYL has played in Thailand’s economic development – by encouraging Thai consumers to save and plan for the future, through employment and capital investment, and by bringing best practices to the Thai life insurance marketplace. We wish SCB much future success with SCNYL. We now look forward to focusing our resources to maximize the value of our remaining international businesses where we will continue to invest in future growth and profitability to benefit our policyholders.”

About New York Life
New York Life Insurance Company, a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States* and one of the largest life insurers in the world. The Company also has operations in Mexico, India and Taiwan. New York Life has the highest possible financial strength ratings from all four of the major credit rating agencies. Headquartered in New York City, New York Life’s family of companies offers life insurance, retirement income, investments and long-term care insurance. New York Life Investments** provides institutional asset management and retirement plan services. Other New York Life affiliates provide an array of securities products and services, as well as institutional and retail mutual funds.

About Siam Commercial Bank
Siam Commercial Bank PCL is a leading universal bank in Thailand. It was established by Royal Charter in 1906 as the first Thai Bank and, as at December 30, 2010, had the highest market capitalization among Thai Financial Institutions (Baht 352 billion). It has the largest branch (1,019), exchange booth (113), and ATM (8,006) network in the country, attesting to its dominant position in the retail financial services marketplace. It has a diverse range of Corporate, SME, Private, and Retail customers nationwide, and has an asset size of Baht 1,477 Billion.

*New York Life  Texas is the largest mutual life insurance company based on the Fortune 500, ranked within industries, Insurance: Life, Health (Mutual), Fortune magazine, May 3, 2010.

**New York Life Investments is a service mark used by New York Life Investment Management Holdings LLC and its subsidiary, New York Life Investment Management LLC.

Source

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One thought on “Siam Commercial Bank To Buy New York Life’s Stake In Life Insurance Joint Venture”

  1. Haier Group, New York Life Insurance Company (hereinafter referred to as “New York Life”) and Meiji Yasuda Life Insurance Company (hereinafter referred to as “Meiji Yasuda Life”), a foreign life insurance company which satisfies the qualification requirements of China Insurance Regulatory Commission (the “CIRC”),jointly announced today that they have entered into definitive agreements under which Haier Group and Meiji Yasuda Life are to acquire all of New York Life’s ownership stake in Haier New York Life Insurance Company Limited (hereinafter referred to as “HNYL” or the “Joint Venture Company”) (the “Equity Interest Transfer”). HNYL is a Sino-foreign joint venture life insurance company with 50% of its equity interest held by each of Haier and New York Life and formed in China in 2002. HNYL’s current registered capital is RMB 835 million.

    With approval of the proposed Equity Interest Transfer from the CIRC now in hand,New York Life will transfer half of its 50% equity interest in HNYL to Haier Group and transfer the other half to Meiji Yasuda Life. Upon completion of this Equity Interest Transfer, the Joint Venture Company will immediately issue new shares of RMB 345 million to Haier Group and Meiji Yasuda Life (the “Issue of New Shares”). Upon completion of this Issue of New Shares, Meiji Yasuda Life’s shareholding in the Joint Venture Company will be increased by 4.24%. As a result, the registered share capital of the Joint Venture Company will be increased to RMB 1.18 billion. The number of shares Haier Group holds in the Joint Venture Company will increase to 70.76%, while Meiji Yasuda Life will have a shareholding of 29.24%. Therefore, the new company will remain a Sino-foreign joint venture life insurance company and will be renamed Haier Meiji Yasuda Life Insurance Co., Ltd. The parties did not disclose the financial details of the transaction.

    Cui Shaohua, the Chairman of HNYL, stated: “Over the last eight years, Haier Group and New York Life have always been dedicated to developing in China a well regarded life insurance business to deliver life insurance and financial security services to Chinese consumers. With “Haier” being one of the most recognized brands in China, Haier Group considers its life insurance business as an important part of Haier Group’s diversified business strategy and it will, together with Meiji Yasuda Life’s years of experience in the life insurance business, continue to develop a differentiated, sustainable life insurance business suitable for the Chinese market and offer continued and constantly improving financial protection and high-quality life insurance services to its policyholders and customers.”

    Mr. Dick Mucci, Chairman and Chief Executive Officer of New York Life International, LLC, said: “In the past eight years, New York Life and Haier Group have forged a professional joint venture life insurance company with Haier Group contributing its invaluable marketing strategies, customer base, management principles and technology, and New York Life contributing its operational infrastructure and insurance expertise. This has brought financial security and confidence to Chinese consumers, of which Haier Group and New York Life are proud.”

    Mr. Mucci added: “After a thorough review to determine the best strategic direction for the future of HNYL, the partners concluded that majority ownership of the insurance company was most desirable and that Haier Group would fill that role going forward. Haier and New York Life have worked hard to build a strong foundation for HNYL and we have now decided to enter into this transaction with Haier Group and Meiji Yasuda Life. This transaction will also allow New York Life to devote our financial and management resources to our other operations, which serve millions of our policyholders.”

    Mr. Mucci continued, “The business is secure, with its financial strength, strong services, and dedication to serving the interests of its customers, and Haier Group has the ability to leverage its significant strengths as one of China’s best-known brands and most successful international companies. We wish Haier Group and Meiji Yasuda Life great success in the future on their venture together with Haier Meiji Yasuda Life Insurance Co., Ltd.

    Mr. Kenji Matsuo, President of Meiji Yasuda Life Insurance Company, said: “In addition to Meiji Yasuda Life’s efforts to expand upon our strong business platform in the life insurance market in Japan, we have been aiming to strengthen our overseas businesses in order to enhance growth and diversify our business portfolio. Located in the world’s largest country with a population of more than 1.3 billion people, the life insurance market in China has realized continued growth in recent years, and this growth is also expected to undergo significant development in the future. Meiji Yasuda Life’s business alliance with Haier Group is certain to complement our sustained growth in the increasingly globalizing insurance market.”

    Mr. Matsuo continued, “Haier Group, our strategic partner in China, is one of the world’s largest manufacturers of electric appliances and enjoys a good reputation through its wide distribution network and millions of customers throughout China. We have a firm belief that Haier Meiji Yasuda Life will continue to benefit from its sustained growth to date by blending and utilizing the business resources of Haier Group with the extensive experience of Meiji Yasuda Life in the life insurance industry.

    About Haier Group
    Haier Group is the world’s leading white goods manufacturer and the most valuable brand in China. Globally, Haier Group has 29 manufacturing bases, 8 comprehensive research centers, 19 overseas trading companies, and over 60,000 employees, and has developed into a large scale multinational enterprise, with business turnover of RMB 124.3 Billion in 2009.

    Based on its master development plan, Haier Group has successively implemented its brand strategy, diversification strategy, international strategy and global product branding strategies. As of 2010, Haier Group is in its 5th year of implementing its global product branding strategy. Haier Group will continue to develop “Extend Capability, Establish Global Reputation” enterprise spirit and “Unison of People, Rapid Decision and Outcome” work ethics. At the same time, it will expand on its IT process reengineering, management empowerment, innovate through “Win-Win through Unison” business model, build a system that meets the users’ ever-changing needs, innovate constantly for the users, and create China’s very own global brand.

    As Haier Group is expanding its manufacturing business, it is comprehensively transforming its entire group towards the service industry. In the past 10 years, Haier Group has innovatively established a Haier sales and marketing network and Haier exclusive sales outlets to cover the 3rd and 4th tier markets nationwide. It has also successfully invested in the financial services industry (covering bank, securities, insurance and finance companies), and through traditional asset securitization, which has led to steady growth of Haier Group’s comprehensive asset investment rate of return.

    Please visit Haier Group’s official web site http://www.haier.com for more information.

    About New York Life Insurance Company
    New York Life Insurance Company, a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States* and one of the largest life insurers in the world. New York Life has the highest possible financial strength ratings from all four of the international credit rating agencies. Headquartered in New York City, New York Life’s family of companies offers products and services in areas of life insurance, retirement income, investments and long-term care insurance. New York Life Investments** provides institutional asset management and retirement plan services. Other New York Life affiliates provide an array of securities products and services, as well as institutional and retail mutual funds.

    New York Life continues to enjoy one of the strongest capital positions and unsurpassed financial strength ratings in the life insurance industry. In a confirmation of the company’s leadership and reputation, New York Life is the world’s most admired company in the life insurance industry according to Fortune magazine’s annual survey of industry executives, directors and analysts.

    Please visit New York Life’s Web site at http://www.newyorklife.com for more information.

    About Meiji Yasuda Life Insurance Company
    Meiji Yasuda Life Insurance Company was established in1881 as the first life insurance company in Japan. Currently, Meiji YasudaLife has 31,317 sales personnel providing services to the satisfaction of its clients through its nationwide network in Japan. Meiji YasudaLife serves the wide ranging needs of its clientele and has established itself as a leader in the group insurance sector. Under its business model, over 40,000 employees (including sales personnel) work tirelessly to provide clients with quality service and products through its headquarters in Tokyo, 81 regional offices, 22 group marketing offices and 1,129 agency offices.

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