Allianz's potential acquisition of Income Insurance sparks mixed reactions online

Conversations online regarding German insurer Allianz’s ongoing discussions to potentially buy Income Insurance are currently 67.6% neutral, 3.8% positive and 28.6% negative, according to media intelligence firm CARMA.

The sentiments reflect that the news has sparked some controversy on social media, with users expressing concerns about the impact on policyholders and the company's financial position, it said. 

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On the other hand, some users have expressed support for the deal, citing the strength of Allianz as a global leader in insurance and the potential benefits for Income Insurance's competitive position in Singapore, said CARMA. 

“Large corporations often find themselves under scrutiny on social media for how consumers perceive their actions. Having a good reputation is the key to reassuring that stakeholder interests will be safeguarded. This is especially important during significant movements like mergers or acquisitions,” said Divika Jethmal, head of marketing at CARMA.

This comes shortly after Income Insurance revealed that Allianz is currently in discussion with it on a transaction relating to the shares of Income Insurance on 14 June. 

"Income Insurance wishes to emphasise that there is no assurance that any transaction will materialise or that any definitive or binding agreement will be reached," it said at the time, adding that it will make further announcements if and when there are any material developments which warrant disclosure, in compliance with applicable laws and regulations.

On 14 July, Income Insurance released a new update saying that discussions were still ongoing and that there was still no assurance that any transaction will materialise or that any definitive or binding agreement will be reached.

"Shareholders are advised to exercise caution when dealing in the shares and to refrain from taking any action in respect of the shares which may be prejudicial to their interests," it added. 

On 17 July, Allianz said that had given a pre-conditional voluntary cash general offer to acquire at least 51% of the shares of Income Insurance, subject to regulatory approval. 

"Allianz intends to offer SG$40.58 per share for a total transaction value of approximately SG$2.2 billion for 51% of the shares in Income Insurance," it said, adding that the proposed transaction marks a key milestone for Allianz in its strategic ambition to expand and strengthen its presence in Singapore - an important market for Allianz, given its status as the financial services hub of Southeast Asia.

Following the close of the offer, Allianz will become the majority shareholder of Income Insurance while NTUC Enterprise will continue to retain a substantial stake, said Income Insurance in response. 

Income Insurance also clarified that Allianz intends for Income Insurance to continue to honour the terms of the existing policies underwritten by Income Insurance and ensure a seamless transition with no impact on policyholders.

It also intends for Income Insurance to continue participating in national insurance programmes, as well as to continue its social commitment and existing pledge of SG$100 million over 10 years from 2021 to promote social mobility among the low-income, support the well-being of seniors, and champion environmental causes, it said. 

Following the announcement, Income Insurance released a statement clarifying some queries from shareholders and policyholders who expressed concern. 

It said that NTUC Enterprise remains firmly committed to Income Insurance and its stakeholders, including policyholders and shareholders, and will continue to do so as it will remain a substantial shareholder following the close of the offer.

It also added that Income Insurance's on-going commitments, including social ones, will continue. 

"Allianz intends for Income Insurance to continue participating in national insurance programmes [and] investing in communities in Singapore and its existing pledge of SG$100 million over ten years from 2021 to promote social mobility among the low-income, support the well-being of seniors and champion environmental causes," it said. Income Insurance added that it will also continue to recognise the union and uphold the principles of good labour-management relations as advocated by the tripartite partners in Singapore.

It also added that minority shareholders will have the opportunity to tender their shares ahead of NTUC Enterprise, it said. 

Shareholders of Income Insurance will receive SG$40.58 per share should they accept the offer and tender their shares. In accepting the offer, shareholders would be accorded priority to tender their shares. They can choose to tender all or some of their shares in acceptance of the offer or choose not to tender at all, during the period when the offer is open for acceptance, it said. 

Morgan Stanley is acting as the exclusive financial advisor to Income Insurance on this transaction.

MARKETING-INTERACTIVE has reached out to both parties for more information. 

Photo courtesy of Income Insurance/LinkedIn

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