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Sun Life To Take Complete Ownership Of Indonesian Firm
Tom Burroughes
25 March 2016
Toronto-listed has agreed to take total ownership of Indonesia-based PT CIMB Sun Life by purchasing an additional 51 per cent of the firm from its long-term partner, CIMB Group, enabling it also to meet Indonesian bank regulations. Since 2006, the Indonesian government has pushed to make the Indonesian banking system more competitive by cutting the large number of Indonesian banks via consolidation. Any controlling shareholder of a bank should be limited to owning only one banking operation in Indonesia. As of 31 December 2015, the Sun Life Financial group of companies had total assets under management of C$891 billion ($670.5 billion). It trades on the Toronto and Philippines stock exchanges.
Prior to the agreement, Sun Life Financial owned 49 per cent of CSL and all of PT Sun Life Financial Indonesia. Both entities are life insurance companies in Indonesia.
The transaction is expected to close by the end of the third quarter of 2016, subject to receipt of regulatory approvals and satisfaction of customary closing conditions. Terms were not disclosed.
Sun Life Financial intends to integrate CSL's business under the Sun Life brand with SLF Indonesia, which is a key step to comply with Indonesia's "single presence" policy, the Canadian firm said in a statement.
In addition, Sun Life Financial Indonesia is deepening its partnership with CIMB Group through an extended bancassurance arrangement with PT Bank CIMB Niaga Tbk, the fifth largest bank by asset size in Indonesia as at the end of December 2015. This arrangement will strengthen distribution capabilities across CIMB Niaga's 618 branches and customer base in Indonesia. CSL customers will continue to have access to the same wealth management and life insurance solutions that they have at present.
"This is an exciting opportunity to deepen and enhance our business in Indonesia, a priority market for our long-term growth in Asia," said Kevin Strain, president, Sun Life Financial Asia.