* Deal to be formally signed on Monday-sources
* Sun Life to buy Aviva's 49 pct stake in JV
* Khazanah to buy CIMB's stake in JV
* Foreign insurers eyeing Southeast Asia expansion
By Denny Thomas and Saeed Azhar
HONG KONG/SINGAPORE, Jan 13 Canada's Sun Life
Financial and Malaysian state investor Khazanah have agreed to
buy Aviva's Malaysian insurance joint venture with lender CIMB
for about 1.7 billion ringgit ($563 million), sources said on
The deal will help the Canadian company expand its Asian
The consortium of Sun Life Financial Inc and
Khazanah Nasional Bhd edged out rival Manulife
Financial Corp to win the eight-month old auction,
sources familiar with the sale process said.
Britain's No.2 insurer Aviva is exiting marginal markets
across the world with the aim of boosting its underperforming
share price, and the sale of its Malaysian unit is part of that
overhaul. Last month, Aviva sold its U.S. business for $1.8
billion, its biggest-ever disposal.
The Malaysian deal is expected to be signed on Monday, the
Global insurers are showing increasing interest in Southeast
Asia because of its rapid economic growth, high savings rates,
and relatively young populations.
Malaysia is the third-biggest economy in the 10-member
Association of Southeast Asian Nations and CIMB has 320 branches
across the country through which it can sell insurance products.
Sun Life already has joint ventures with CIMB Group Holdings
Bhd elsewhere in Asia.
A Sun Life spokeswoman did not offer an immediate comment.
Aviva could not be reached for comment immediately. CIMB and
Khazanah officials were not available for an immediate comment.
Aviva's sale of its Malaysian operations drew interest from
Prudential Plc and AIA Group Ltd. AIA dropped
out of the bidding last fall after making a successful bid for
ING Groep NV's Malaysian operations.
Under the deal, Sun Life will buy Aviva's 49 percent stake
in the joint venture, while Khazanah will buy CIMB's stake.
"Most of the value comes from the exclusive distribution
agreement that Aviva has with CIMB," one person familiar with
the matter told Reuters.
Aviva and CIMB entered into a 20-year bancassurance
agreement five years ago.
As part of a business reorganisation launched last July,
Aviva decided to sell or close 16 businesses that tie up over a
third of the insurer's capital while contributing just 18
percent of operating profit.
Aviva's Malaysian operations were formed as a joint venture
with CIMB in 2007. The business struggled, and Aviva announced
its intention to sell its underperforming assets and boost its
capital reserves and share price last summer.
Aviva recently sold its Sri Lankan operations to AIA, and
named New Zealand-born Mark Wilson as its new chief executive.
For the Malaysia deal, Sun Life was advised by Bank of
America Merrill Lynch. Morgan Stanley advised Aviva, JPMorgan
advised CIMB and Rothschild advised Khazanah.