Khazanah Nasional said on Monday that it has offered to buy 90% of Turkey’s second-biggest health insurer Acibadem Saglik ve Hayat Sigorta for $252 million in cash.
The deal marks the largest investment in a Turkish financial institution by a Southeast Asian-based firm.
Southeast Asia’s largest financial investors are increasingly buying assets in emerging markets around the world rather than in the more sluggish economies of the US and Europe where some were burnt trying to pick up bargains during the global financial crisis.
The purchase “allows us to tap into the attractive growth opportunities offered by the Turkish insurance market”, said Azman Mokhtar, a Khazanah managing director.
Khazanah has been steadily building an insurance platform across emerging markets and the purchase of Acibadem Sigorta adds specialist healthcare insurance products to the group.
Avicennia Capital, the insurance holding company of Khazanah, earlier this year bought a 49% stake in Malaysian life insurer CIMB Aviva Assurance and CIMB Aviva Takaful, a Malaysian takaful company. It is also an investor in Singapore-headquartered reinsurer ACR Capital Holdings.
“The linkages are starting to come together,” said a person familiar with the transaction. Khazanah is looking to use its expertise Islamic insurance, known as takaful products, across its platform. It can also leverage technical knowledge in underwriting, risk management across the insurance companies in its portfolio as well as negotiate cheaper reinsurance contracts as a bulk buyer.
Khazanah will also be able to roll out products from this specialist healthcare insurer across its hospital platform IHH Healthcare. IHH owns Turkey’s largest hospital chain Acibadem Healthcare.
Acıbadem Sigorta operates six regional offices across Turkey and its premium health insurance offers customers access to a network of healthcare facilities across the country.
Khazanah is acquiring the Istanbul-headquartered company from Turkey’s Aydinlar family as well as from Dubai-based private equity firm the Abraaj Group. Family member and founder of the Acibadem healthcare group, Mehmet Ali Aydinlar, will retain a 10% stake in the company and will remain as chairman.
The deal still needs regulators’ approval in Turkey and Malaysia.
Bank of America Merrill Lynch and CIMB jointly advised Avicennia Capital and Khazanah on this acquisition. Lazard and Raiffeisen advised Abraaj and the Aydinlar family on this transaction.