In a move that no one saw coming, the deal between Income and Allianz is off.
This was announced today in Parliament by Mr Edwin Tong, Minister for Culture, Community and Youth, and Second Minister for Law.
Here’s what happened.
Summary of Why the Deal Between Income & Allianz is Now Off
If you’re not aware of the details, you might want to watch this video until the end first:
So, what happened?
The move to block the transaction came after the Monetary Authority of Singapore (MAS) provided the Ministry of Culture, Community and Youth (MCCY) with new information following a parliamentary debate on 6 August.
One of the issues was Allianz’s plan to return $1.85 billion to shareholders within three years by running its business more efficiently and holding less capital, contradicting the premise of a previous exemption granted during Income’s corporatisation.
Mr Tong noted that MCCY had not been aware of this plan when the deal was initially assessed.
Additionally, MCCY found no clear provisions to ensure that Income would continue to fulfill its social mission post-deal.
He explained, “The Government has assessed the proposed transaction and has decided that it would not be in the public interest for the transaction, in its current form, to proceed.”
Prime Minister Lawrence Wong clarified that while the government supports a strong partner for Income, this specific transaction raised concerns. He stated that they remain open to new proposals from Allianz or other partners, provided the raised issues are addressed.
Legislative Changes Ahead
As a result, the Government will make urgent amendments to the Insurance Act, giving it the power to block such deals.
This will allow the Monetary Authority of Singapore (MAS) to consider MCCY’s perspective on future deals involving insurers that are cooperatives or linked to cooperatives.
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