Public Bank Berhad has entered into a landmark agreement to acquire a 44.15% interest in LPI Capital Bhd for RM1.72 billion, significantly boosting its footprint in Malaysia’s insurance sector.
The deal was sealed on October 10, with Public Bank acquiring shares from the estate of the late Tan Sri Dato’ Sri Dr. Teh Hong Piow and Consolidated Teh Holdings Sdn Bhd.
LPI Capital, a well-established general insurance firm, has been in operation for more than 60 years and maintains a network of 21 branches across Malaysia. Additionally, the company has a presence in Singapore and Cambodia through regional partnerships.
Strategic Acquisition to Strengthen Insurance Presence
Public Bank CEO, Tan Sri Dato’ Sri Dr. Tay Ah Lek, highlighted the strategic significance of the acquisition, noting that it enhances Public Bank’s position in the general insurance market.
“This acquisition will allow the enlarged Public Bank Group to gain an immediate and robust foothold in the general insurance sector, complementing our existing financial services and Family Takaful offerings,” Tay said.
This acquisition follows Public Bank’s recent expansion into Vietnam, where it acquired Public Bank Securities Vietnam Company Limited, broadening its services to include securities trading in the region.
Tay further emphasized that the acquisition aligns with Public Bank’s goal of adopting a “Universal Banking Model,” integrating a wide range of financial services. He also pointed to cross-selling opportunities between Public Bank and LPI Capital, which could be leveraged to expand the customer base using the distribution networks of both companies.
Regulatory and Shareholder Approvals
As a related-party transaction, the deal will require the approval of non-interested shareholders at an Extraordinary General Meeting (EGM) to be held at a later date. Upon approval, Public Bank will be required to make a mandatory takeover offer for the remaining shares in LPI Capital.
The acquisition has already received regulatory approval from Bank Negara Malaysia and the Ministry of Finance, with the transaction expected to conclude by the first quarter of 2025.
Phased Sale of Public Bank Shares by Teh Family
In a separate development, Diona Teh Li Shian, the daughter of the late Tan Sri Teh Hong Piow, announced that the Estate and Consolidated Teh Holdings will gradually sell a portion of their shares in Public Bank over the next five years, in compliance with Malaysia’s Financial Services Act.
Despite reducing their shareholding, Diona Teh reiterated the family’s ongoing commitment to the future of Public Bank.
“To honour my father’s legacy and express our deep appreciation, we will undertake an initiative to distribute a portion of our Public Bank shares at a discounted rate to employees, directors, and eligible shareholders of the Public Bank Group,” she stated.
A Bold Move to Expand Insurance Offerings
With this acquisition, Public Bank is poised to expand its insurance services, while the Teh family’s actions affirm their continued support for the institution’s long-term growth. The deal not only reinforces Public Bank’s diversified financial portfolio but also solidifies its position in the competitive Malaysian insurance market.
