ASEAN KEY DESTINATIONS
Malaysia Maybank quits bid for Indonesian insurer
Malaysia's largest lender Maybank has dropped a plan to buy a controlling stake in an Indonesian insurer after protracted negotiations, reported Reuters.
"Maybank would like to inform that due to unavoidable circumstances not within its control, both Maybank and Panin are unable to proceed further in formalising the proposed joint venture partnership," Maybank said in a statement on Wednesday.
Maybank had been in discussions with Panin on the acquisition of a 60 percent stake in its Indonesian insurance arm, PT Anugrah Life Insurance.
But Indonesia's Ministry of Finance blocked the transaction in November, saying it did not meet the country's foreign investment rules.
The Indonesian regulations require a foreign holding company to maintain a majority of its portfolio in insurance business should it wish to become a shareholder of a local insurance company.
In a bid to meet the requirement, Maybank announced in April its Malaysian insurance arm, Mayban Fortis Holdings, would take the lead in the deal, spurring hopes that a tie-up might result.
The latest development marks the second failed attempt by Maybank to gain a foothold in the most populated Islamic country in Southeast Asia due to regulatory issues.
Last month, Bank Negara Malaysia, the central bank, scuppered a Maybank proposal to buy a controlling stake in Bank Internasional Indonesia BNII.JK.
The central bank said it was concerned that new Indonesian takeover rules which came into effect in July could lead to material losses for Maybank.
The Malaysian lender said it would continue to look for investment opportunities in Indonesia despite the termination of deal with Panin.
"Since Indonesia is still a target market for Maybank's insurance and takaful expansion, Maybank will continue to look for possible options in developing its insurance and takaful business in Indonesia," said Maybank.