Singapore-based Oversea-Chinese Banking Corporation (OCBC) has made a S$1.4bn ($1.03bn) offer to acquire the remaining shares of insurance company Great Eastern Holdings.

The offer price of S$25.6 per share marks a 36.9% premium over Great Eastern’s last stock close of S$18.7.

This proposed acquisition would increase OCBC's stake in Great Eastern to 100%, up from the current 88.44%.

If the deal is materialised, it will lead to OCBC delisting the insurer from Singapore Exchange Securities Trading.

Great Eastern, established in 1908, claims to have more than S$100bn in assets and serve more than 16 million policyholders.

It operates through multiple channels, including a tied agency force, bancassurance and its financial advisory unit.

The acquisition is part of OCBC's broader strategy to fortify its core business areas – banking, wealth management and insurance.

By integrating Great Eastern more closely, OCBC aims to capitalise on the growing demand for wealth management solutions in Asia.

This acquisition is anticipated to be earnings accretive for OCBC, with Great Eastern historically contributing an average of S$700m annually to OCBC's net profit, accounting for around 15% of the bank's annual net profit over the past decade.

OCBC made two previous offers to increase its ownership in Great Eastern, one in 2004 and another in 2006.

The bank has held a majority stake in Great Eastern over the past two decades.

OCBC group CEO Helen Wong said: “The offer is a natural progression of OCBC’s strategy. We have moved intentionally to build up a strong wealth management franchise by hiring the best people and instituting best practices and processes, and raising our investment in Great Eastern.

“We have been looking at opportunities to best use our capital and believe the offer allows us to deploy our resources into a key business that is expected to be earnings accretive to OCBC.”

"OCBC makes $1bn privatisation bid for Great Eastern " was originally created and published by Life Insurance International, a GlobalData owned brand.

 

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