JOHANNESBURG, April 23 South Africa's biggest insurer, Sanlam, said on Wednesday it would buy a majority stake in Malaysia's MCIS Zurich Insurance Berhad for about $119 million, further expanding its presence in the southeast Asian nation.
Sanlam said it would initially buy a 40 percent from a major shareholder, Koperasi MCIS Berhad, and another 11 percent through an offer to minority shareholders.
Koperasi will part with bigger chunk should minority shareholders decline whatever bid Sanlam places on the table.
After the 1.25 billion rand ($119 million) purchase, MCIS Zurich will have to dispose of its short-term insurance business as Malaysian regulations do not allow an investor to operate more than one life or general insurance licence.
Sanlam already has a short-term insurance business in Malaysia after acquiring a 49 percent share in Pacific & Orient Insurance Co. in 2013.
MCIS Zurich, which has both life and general insurance operations and 3,400 agents serving its 26 branches, posted a 49 percent increase in earnings per share in the six months to end-December 2013.
Sanlam, which also has operations in India and 15 African countries, has a war chest of more than $370 million for acquisitions in emerging markets this year.
Sanlam shares were relatively unchanged, slipping just 0.11 percent lower to 55.15 rand at 0922GMT, compared with a 0.3 percent rise by Johannesburg's Top-40 index. ($1 = 10.5448 South African Rand) (Reporting by Helen Nyambura-Mwaura; editing by David Dolan)