Key Transaction Highlights

• Prudential plc has announced an agreement to increase its ownership interest in Prudential Assurance Malaysia Berhad (PAMB) to 70%.
• The acquisition involves the purchase of a 19% stake in Sri Han Suria Sdn. Bhd. (SHS), the holding company of PAMB, from Detik Ria Sdn. Bhd. for a total cash consideration of RM 1.52 billion (approximately US\$375 million).
• After completion, Prudential’s indirect subsidiary (PCHL and its wholly-owned subsidiary PCAIPS) will hold 70% of SHS, while Detik Ria will retain a 30% stake.
• BNM Approval (Bank Negara Malaysia) for the transaction has already been obtained. Completion is expected seven business days after signing.

Shareholder Relevance and Price Sensitivity

• The transaction is classified as a connected transaction under the Hong Kong Listing Rules, as Detik Ria is a substantial shareholder in SHS and therefore a connected person at the subsidiary level.
• The transaction triggers reporting and announcement requirements but is exempt from circular and independent shareholders’ approval requirements due to the applicable percentage ratios being above 1% but below 5%.
• Valuation multiples for the acquisition are price-to-earnings of 7.0x and price-to-book of 0.8x, both within the range of comparable listed life insurers in Malaysia and Southeast Asia. This reflects market-standard pricing and signals management confidence in the ongoing value of the Malaysian business.
• Detik Ria’s original acquisition cost for the shares in 2001 was RM19,000, indicating a substantial increase in value over time.
• Prudential has agreed to cooperate with Detik Ria on any future divestment of Detik Ria’s remaining 30% stake in SHS, which could bring further changes to ownership structure in future.

Strategic and Financial Impact

• Prudential will gain increased economic benefit from SHS, balancing capital outlay and risk. The increased stake is expected to be accretive to earnings per share, traditional embedded value, and shareholders’ equity per share for the Prudential Group, based on unaudited H1 2025 results.
• Prudential will continue to consolidate PAMB’s results in its financial statements. The proportion of profit and equity attributed to non-controlling interests will decrease, increasing Prudential’s share of Malaysian profits.
• The audited financials for SHS Group show strong performance:
  • FY2024 profit before tax: RM1,896 million
  • FY2024 profit after tax: RM1,135 million
  • FY2024 net asset value: RM9,676 million
• The transaction strengthens Prudential’s presence in a high-growth Southeast Asian market, reinforcing its commitment to Malaysia and the region.

Details on Parties Involved

• Detik Ria is principally an investment holding company, owned by a consortium of Malaysian entities, each holding 10%, including Berjaya Capital Berhad and other local companies. Ultimate beneficial interests are spread across individuals and entities, with no single party holding more than 10%.
• SHS is the direct parent of PAMB, Prudential’s conventional life insurance business in Malaysia.
• Prudential plc is listed on the Stock Exchange of Hong Kong, London Stock Exchange, Singapore Exchange, and NYSE (ADR form). It operates life and health insurance and asset management across Greater China, ASEAN, India, and Africa.

Potential Share Price Impact

• The transaction is potentially price sensitive due to its impact on Prudential Group’s earnings and equity metrics, and it demonstrates confidence in the Malaysian business.
• The accretive nature of the deal to key financial metrics could be viewed positively by investors, potentially supporting the share price.
• The increased exposure to Malaysia, a robust and growing insurance market, may also be seen as a strategic positive.
• The absence of the need for an independent shareholder vote removes a layer of uncertainty, streamlining completion.

Other Important Notes

• No profit forecasts or estimates have been made in the announcement; historical performance should not be used as a direct guide to future earnings.
• Prudential has confirmed, through its Board including independent non-executive directors, that the transaction terms are fair, reasonable, and in the best interests of shareholders.
• No director has a material interest in the transaction and no director abstained from voting.

Contact Information

Media: Simon Kutner (+44 7581 023260 UK), Sonia Tsang (+852 5580 7525 HK)
Investors/Analysts: Patrick Bowes (+852 2918 5468 HK), William Elderkin (+44 2039 779215 UK)

About Prudential plc

Prudential provides life and health insurance and asset management across Asia and Africa, with a mission to offer simple and accessible financial and health solutions. It is listed on major stock exchanges and is a constituent of the Hang Seng Composite Index, as well as the Shenzhen-Hong Kong and Shanghai-Hong Kong Stock Connect programmes.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. Investors should conduct their own due diligence and consult their advisors before making investment decisions. Past performance is not indicative of future results.

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