Munich-headquartered Allianz has withdrawn its offer to acquire a majority stake in Singapore's Income Insurance following the local government’s rejection of the deal.

Allianz has withdrawn its pre-conditional voluntary cash general offer to acquire at least 51 percent of Income Insurance, according to a statement.

This follows the rejection of the deal in October by the Singapore government which cited issues including substantial capital reduction and concerns about Income’s ability to fulfill its «social mission» of serving local workers as one of the city-state’s four systematically important insurers. The original offer had a transaction value of S$2.2 billion ($1.6 billion).

«Right Partner»

Despite the withdrawal, the German firm said it was convinced that it is the «right partner to support Income Insurance’s continued growth and its strategic mission for the benefit of Singapore’s people», adding that its decision to withdraw underscores its financial discipline.

«We respect the Singapore Government’s decision,» said Renate Wagner, a member of Allianz SE’s management board responsible for the Asia Pacific region.

«We still believe the combination of Allianz and Income Insurance would result in two strong businesses being brought together for the benefit of Income Insurance’s policyholders and a growing portion of Singapore’s customers. We regret having to make this decision but we will, without question, carry on supporting the Singapore insurance market’s continued growth and success.»

Strategic Market

Nonetheless, APAC remains strategically important to Allianz with 7.7 billion euros ($8.1 billion) in total business volume across the region’s property-casualty and life/health retail insurance businesses in 2023. Singapore, as the regional hub for Southeast Asia, will also remain an important market.

«We have full confidence in the future strength and potential of our existing operations across the region, and we look forward to continuing to deliver exceptional value to our customers and partners across Asia Pacific,» added Wagner.