Blog

THE deal between NTUC Income and German insurer Allianz will be called off, as the government has assessed it is “not in the public interest” for the proposed transaction to proceed in its current form.

This is due to new information received by the Ministry for Culture, Community and Youth (MCCY), which has led it to doubt that Income will be able to continue fulfilling its social mission if the deal were to go through, said Minister Edwin Tong in Parliament on Monday (Oct 14) afternoon.

“Our concern is only over the terms and structure of this specific transaction, particularly in the context of the preceding corporatisation exercise,” he said.

While the government will not allow the current deal to proceed, it is “nonetheless open to any new arrangement which Income may wish to pursue, whether with Allianz or any other partners”, so long as its current concerns are fully addressed.

This week, the government will also table amendments to the Insurance Act to allow the Monetary Authority of Singapore (MAS), the authority overseeing the law, to consider the views of MCCY in the case of an application relating to an insurer that is either a co-op or linked to a co-op.

As Income is now a corporate entity, it is no longer subject to the jurisdiction of the Registrar of Co-ops. Instead, any proposed transactions rest under the Insurance Act.

MAS considers a range of criteria on prudential grounds when assessing deals under the Act, and there is no provision for the authority to consider deals in the public interest.

The amendments will be tabled by Second Finance Minister Chee Hong Tat on Monday and will be debated in Parliament on Wednesday.

Under the proposed transaction announced in July, Allianz planned to acquire acquire 51 per cent of Income at S$40.58 per share, in a deal amounting to 1.5 billion euros.

This is a breaking story and more details will come.