ACE Limited (NYSE: ACE) announced today that the company and its local partner have reached a conditional agreement to purchase a 60.9% stake in The Siam Commercial Samaggi Insurance PCL, a general insurance company in Thailand, from Siam Commercial Bank.
Established in 1947 and listed on the Stock Exchange of Thailand, Bangkok-based Siam Commercial Samaggi Insurance is a major writer of auto, small commercial and personal accident insurance and distributes its products through both Siam Commercial Bank’s branches and independent agents through the insurer’s own extensive branch network. In 2012, the insurer had approximately $138 million in gross premiums written.
“Thailand is the second-largest economy in Southeast Asia and at the heart of Indochina – a region that includes Vietnam and Myanmar. ACE has been operating there for many years and has built a strong local insurance business focused on industrial commercial property and casualty, accident and health, and life,” said Evan G. Greenberg, Chairman and Chief Executive Officer, ACE Limited. “Siam Commercial Samaggi Insurance is a well-established and trusted insurer in Thailand. This transaction presents an excellent opportunity for ACE to further build our business in this fast-growing market by expanding our presence in personal and small commercial insurance. We look forward to forging a relationship with Siam Commercial Bank, one of the country’s largest and most venerable financial institutions, and we intend to grow the number of products and services offered through Siam Commercial Samaggi Insurance by leveraging our global product expertise. We are confident that over the medium and long term this business will provide outstanding value to our customers and business partners and generate superior returns for our shareholders, and we expect this transaction will be immediately accretive to our earnings.”
The transaction is expected to be completed in the second quarter of 2014 and is subject to due diligence by ACE and customary closing conditions including Siam Commercial Bank shareholder approval. On closing of this transaction, in compliance with Thai regulations, ACE and its local Thai partner will make a mandatory tender offer for the remaining 39.1% of Siam Commercial Samaggi Insurance. The total transaction is valued at approximately $185 million.
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