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Allianz Eyes Singapore Expansion with SG$2.7 Billion Deal for HSBC's Life Insurance Business

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Allianz Eyes Singapore Expansion with SG$2.7 Billion Deal for HSBC's Life Insurance Business

Allianz (ALV.F) is looking to further expand in Singapore through a SG$2.7 billion deal with HSBC (HSBA.L) for the acquisition of the British lender's life and health insurance business in the Asian city-state.

The German insurer's Allianz Asia Holdings is purchasing HSBC Life (Singapore) from HSBC Insurance (Asia-Pacific) Holdings, according to Friday filings. Completion of the transaction is expected in the first half of 2027, subject to the approval of relevant regulators.

The transaction supports the purchaser's strategy to grow its customer base in Asia and is expected to provide the group with a double-digit return on investment in the medium term.

"Singapore serves as our Asia-Pacific headquarters and is central to our global growth strategy," said Allianz Chief Executive Officer Oliver Bäte. "Allianz's expansion in Singapore underscores our resolve to help more people meet their protection, health, retirement and wealth needs globally."

For HSBC, the transaction is expected to generate a $1.8 billion pretax gain on disposal, to be recognized largely upon completion. The deal also supports the selling group's strategy to streamline its organization.

"The Transaction forms part of the ongoing simplification of the HSBC Group as it focuses on increasing leadership and market share in the areas where it has a clear competitive advantage and the greatest opportunities to grow and support its clients," HSBC noted.

Upon closing, HSBC Life (Singapore), which will be rebranded in line with the new ownership, will enter into a 15-year bancassurance distribution agreement with HSBC Bank (Singapore). Allianz will make an additional SG$200 million cash payment for the distribution deal.

Allianz shares rose marginally in early morning trading on Friday, while HSBC shares in London grew more than 1%.

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