Joint venture with BPI to boost operations
By Doris Dumlao
Philippine Daily Inquirer
First Posted 23:14:00 08/26/2009
Filed Under: Company Information
PHILIPPINE AMERICAN Life and General Insurance Co. (Philamlife) has entered into a deal to acquire a 51-percent stake in the Ayala Group’s life insurance business to form a formidable bancassurance venture with local banking giant Bank of the Philippine Islands.
The biggest and most profitable insurance company in the country, a crown jewel that was earlier put up for grabs by the American International Group, has turned into an acquirer of a majority stake in BPI subsidiary Ayala Life Assurance Inc. (Ayala Life).
Under an agreement announced yesterday, Ayala Life will serve as the platform for BPI and Philamlife’s strategic bancassurance partnership.
“This partnership is a direct result of our strategy to focus on the core life insurance and wealth management business. Philamlife and BPI are strong and trusted brand names in the industry. This is an exciting and positive development that will significantly increase our distribution footprint and offer a substantially wider selection of quality life insurance products to BPI’s customers,” Philamlife president and chief executive Trevor Bull said in a statement.
BPI president and CEO Aurelio Montinola III said the joint venture was fully in line with BPI’s vision to offer a full range of financial products and services to its customers.
“We believe that there are significant cross selling opportunities on both sides. We feel that in the same way that Philamlife will have access to our customer base for life insurance products, BPI will have reciprocal access to Philamlife’s customers for banking products, ” Montinola said.
BPI Capital and ING acted as financial advisers to BPI while Deutsche Bank acted as sole financial adviser to the Philamlife group for the transaction. The joint venture is subject to regulatory approvals. The value of the deal was not disclosed.The joint venture is seen benefiting from the combined synergies, high quality resources and strength of two leading companies in the Philippines’ financial industry. Philamlife is expected to bring insurance distribution, product development, and innovation to the joint venture, particularly in the area of bancassurance, while gaining exclusive access to BPI’s customer base via its extensive branch network.
With 158 years of experience in the local banking industry, BPI is the most valuable Philippine bank with P146 billion in market capitalization as of yesterday.
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