Singapore – The Singaporean government has blocked the supposed deal between Allianz and Income–yet has left its door open should concerns on public interest have been raised and addressed by both parties.
In a recent ministerial statement by Minister of Culture, Community and Youth (MCCY) Edwin Tong, he stated that should this deal push through, Income will not be able to fulfill its social mission as a cooperative after the acquisition.
The MCCY raised significant concerns over a planned capital reduction that would distribute around S$1.85b to shareholders shortly after the deal’s conclusion. This move contradicted Income’s prior commitments made during its corporatisation process, where it pledged to strengthen its capital reserves for enhanced financial stability.
Furthermore, the deal lacked enforceable safeguards to preserve Income’s cooperative identity and its mission to serve the community. MCCY worried that this could negatively impact both policyholders and the cooperative sector.
Although the Monetary Authority of Singapore (MAS) had no issues from a regulatory perspective, MCCY viewed the deal as inconsistent with Income’s long-term social obligations. The government remains open to reconsidering the transaction if these critical concerns are resolved.
In a Facebook post by Prime Minister Lawrence Wong, he stated that they have tabled an amendment to the Insurance Act in Parliament today to allow MAS to withhold approval of the sale on the grounds of public interest when it involves a current or former cooperative insurer.
He also clarified that the Singaporean government supports having a strong partner for Income, so as to strengthen its capital base and market position, and has no concerns over Allianz’s standing or suitability to acquire a majority stake in Income.
“Our concerns are over the structure and terms of this specific transaction, particularly in the context of assurances which Income had given to MCCY when the former was corporatised in 2022. Though this transaction will not proceed, we remain open to a new deal that Income may pursue with Allianz or other partners, so long as our concerns are fully addressed,” Wong stated.
Allianz announced back in July that it is set to acquire at least 51% of the shares in leading local insurer Income Insurance, which will be done through its wholly-owned subsidiary Allianz Europe B.V.
