TEXT-Fitch:No rating impact on AIA Thailand from AIA's ING Malaysia acquisition

Fri Oct 12, 2012 3:32am EDT

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(The following statement was released by the rating agency)

Oct 12 - Fitch Ratings says that American International Assurance Company Limited, Thailand Branch's (AIA Thailand) 'AAA(tha)' National Insurer Financial Strength (IFS) Rating with Stable Outlook will not be affected by American International Assurance Company Limited's (AIA) planned purchase of ING Management Holdings (Malaysia) Sdn Bhd (ING Malaysia) from ING Insurance Asia N.V.

Fitch is of the view that the proposed purchase for EUR1.336bn (USD1.73bn) in cash will not materially affect the strong financial fundamentals of AIA and its Thailand branch, given the modest size of the acquisition relative to AIA's capital base. The proposed transaction is subject to approvals from the relevant authorities.

The transaction, if successfully executed, should bring about strategic benefits and operational synergies to the AIA Group with a combined customer base of over 2.6 million. It will elevate the group's franchise and presence in Malaysia and make AIA Group the largest insurer in the market. It will also broaden its existing bancassurance distribution with the addition of an exclusive long-term bancassurance arrangement with Public Bank Berhad, one of Malaysia's established banking groups with over five million customers and more than 250 branches. This will contribute positively to AIA Group's overall credit profile. Nonetheless, the integration process would take time, as this is AIA Group's first major acquisition since its IPO listing in HK in 2010.

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