Outlin

e
 Insurance
 Merger, Acquisition,
Takeover & Amalgamation
 M&A In Insurance
 Recent M&A in Insurance
 Insurance M&A scenario in
India
 Insurance

 Insurance is pooling of risks.

 Insurance, whether life or non-life, provides

people with a reasonable degree of security and
assurance that they will be protected in the
event of a calamity or failure of any sort.
 Merger And Acquisition
Merger - Combination of two or
more companies into a single
company where one survives and
the others lose their corporate
existence .

Acquisition - Also
known as a takeover, is
the buying of one
company (the ‘target’) by
another.
 Difference
Merger
Two firms are combined
on a relatively co-equal
basis
Parent stocks are usually
retired and new stock
issued
 Name may be the
original or a combination
One of the partners take
over the dominant
management
Acquisition
One firm buys another
firm
 Can be by means of
controlling share, a
majority, or all of the
target firm’s stock
 Can be friendly or hostile
 Usually done through a
tender offer
Modes of Mergers &
Acquisitions
 M & A in
Insurance
 Grown since early 1990s.
 Mainly due to opening of
financial sectors and economic
reforms.
 Both within border and cross
border mergers.
 USA and UK lead the list of countries that feature among
the top in terms of insurance mergers and acquisitions.
 Other countries with mergers and acquisitions in the
insurance sector include Netherlands, France, Italy, Germany,
Japan, Switzerland, Canada, Australia, Belgium, Spain and
Sweden.
Comparative Figures in
Insurance M & A during the
period 1990 -2003
Number of Value
Country
M&A ( in million dollars)
USA 606 210167
UK 217 67586
Germany 91 19870
Italy 82 19912
Spain 73 3116
France 64 24551
Canada 62 9700
Netherlands 58 25440
Australia 48 4778
J apan 47 17807
Belgium 30 3739
Switzerland 21 11451
Sweden 14 2806
TOTAL 1413 420922
 AIG agrees to $35.5 billion unit
sale to Prudential

 American International Group Inc agreed to a $35.5 billion

sale of its Asian life insurance unit to Britain's Prudential Plc on
March 1,2010.
 Prudential pays about $25 billion in cash and the rest in
equity, the sources said.
 It would be one of the largest overseas deals to date for a
British firm and make Prudential one of the biggest
insurers in Southeast Asia.
 "This transaction offers the opportunity to bring together two
leading companies, positioning the combined group to capture
the future growth opportunity in Asia," Prudential said in the
statement.
 AIG selling ALICO to MetLife for $15.5
billion
 MetLife said Monday that it would pay AIG
$6.8 billion in cash and about $8.7 billion in
equity for the American Life Insurance Co.
unit.
 ALICO sells life, accident and health
insurance as well as retirement and wealth
management products in more than 50
countries.
 The deal will help MetLife, to diversify
revenue sources by product, distribution and
geography.
 Insurance M&A
scenario in India

 Insurance sector likely to witness

consolidation.
 IRDA is in the process of finalizing guidelines
for mergers and acquisitions in the insurance
space.
 It will help companies to fund their expansion
plans to tap the huge potential for insurance
products in the country.