AIA said it will divest its general insurance subsidiary and Janashakthi said it will a share purchase agreement has been signed to acquire AIA General Insurance Lanka Ltd. The two also held separate press conferences to announce the move.
“Being the second largest insurer in the world we want to focus our strategy on realising the significant growth opportunities in the life insurance market in Sri Lanka,” AIA Sri Lanka CEO Shah Rouf said.
Janashakthi PLC Executive Director Ramesh Schaffter revealed that the company is set to fund the Rs 3.2 billion acquisition via a rights issue of Rs 3.3 billion.
The acquisition will be completed by 31 October 2015.
Prior to the move, Janashakthi General Insurance accounted for a market share of 11.4% and AIA General amounted to 6% and the acquisition will boost Janashakthi’s market share to 17.4%.