Khazanah buys Turkish insurer for US$252 million

Sovereign wealth fund Khazanah Nasional Bhd’s insurance arm Avicenna Capital Sdn Bhd has acquired a 90% stake in Turkish healthcare insurer, Acibadem Sigorta for US$252 million, it said in a statement today.

According to Turkish daily Hurriyaat Daily News on Satuday, three global firms were in the race to buy a stake in leading Turkish health insurer Acibadem Sigorta, sources familiar with the matter said, underscoring appetite among international investors for the fast-growing sector.

Sompo Japan Insurance, Malaysia’s state-run investment firm Khazanah Nasional Berhad and British medical services group Bupa were involved in an auction process for the stake, three banking sources said, the daily reported.

Under deal, Avicennia Capital via its special purpose vehicle Burau Ventures Sdn Bhd will acquire a combined 90% stake from Mehmet Ali Aydinlar and family and The Abraaj Group, a leading investor operating in growth markets. Aydinlar will continue to retain a 10% stake in Acibadem Sigorta.

Acibadem Sigorta  is headquartered in Istanbul and also operates six regional offices across Turkey. Acibadem Sigorta’s premium health insurance offering provides its customers with access to a large network of high quality healthcare facilities in Turkey.

The Acibadem Sigorta acquisition will complement Avicennia Capital’s acquisition of the CIMB Aviva insurance businesses in Malaysia in early 2013 and forms an important piece of an insurance platform that Khazanah via Avicennia Capital is seeking to build-up, the state asset manager said.

Khazanah’s existing portfolio of insurance assets includes ACR Capital Holdings Pte Ltd's (“ACR”) group of companies. ACR specialises in providing conventional and takaful reinsurance solutions for large and complex risks.

It is the world’s first independent reinsurance company with an exclusive focus on serving clients in the fast-growing pan-Asian region, extending from the Middle East, through China to Japan and South East Asia, Khazanah said.

This acquisition  provides us with the opportunity to invest in a quality asset and allows us to tap into the attractive growth opportunities offered by the Turkish insurance market.

"We are delighted to be working with Aydinlar again following our partnership and investment in the Ac?badem Healthcare Group. The transaction also broadens our presence in the insurance sector.” Khazanah managing director Tan Sri Azman Mokhtar said in the statement.

The completion of the Acibadem Sigorta acquisition is conditional upon the satisfaction of certain conditions precedent and the approvals of regulators in Turkey and Malaysia, the statement said.

Turkey’s economy, the fastest growing in Europe in 2011, expanded by less than 3% last year but its relatively young and growing population of 75 million is regarded as under-insured, according to Hurriyat Daily News.

Health insurance premiums were up 7.7% percent at 678 million lira (US$350 million) in the first two months of 2013. Acibadem Sigorta’s premium income grew 22 % to 150 million lira in the same period, making it the largest gainer in health premiums, according to the Insurance Association of Turkey.

Last year, health insurance premiums grew 12% to 2.24 billion lira and Acibadem Sigorta’s premium income jumped 36% to 230.3 million lira.

Allianz, Europe’s biggest insurer, bought rival Turkish insurer Yapi Kredi Sigorta from Turkish lender Yapi Kredi Bank in March for 1.6 billion lira to secure a bigger slice of a fast-expanding market. - July 29, 2013


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