Singapore Halts Allianz Acquisition Through Legislative Amendment

Singapore's legislators have recently amended insurance law to halt Allianz's planned acquisition of a majority stake in the local insurance company Income Insurance, valued at $1.7 billion. The amendment stipulates that in the future, not only the financial supervisory authority but also the relevant ministry must approve deals involving insurance companies that are cooperatively organized or linked to such entities. The government's rationale for the legal change is its assessment that the Income Insurance transaction in its current form would not serve the public interest. The continuation of Income's social purpose as a cooperative after an acquisition is seen as particularly critical. Transport Minister and Deputy Chairman of the Monetary Authority of Singapore (MAS), Chee Hong Tat, emphasized that the changes are urgent as the deal is being actively reviewed by Income's shareholders. Chee clarified that the government's concerns are unrelated to Allianz's reputation but pertain to the specifics of the transaction. The new law grants the minister responsible for the MAS the authority to block acquisitions if they affect public interests. This allows the minister to reject transactions involving cooperative insurers like Income, should it seem justified, and this without possibility of appeal. Chee specifically pointed out the urgency of the legislative proposal, given the active review of the transaction by Income's shareholders. Allianz and Income Insurance had begun discussions on a potential partnership in July. Allianz's plan to acquire at least a 51% stake in Income from NTUC Enterprise Co-operative met with widespread criticism. Income Insurance, which took over the assets of Income Co-operative in 2022, is 72.8% majority-owned by NTUC Enterprise.