HDI-Gerling Industrie Versicherung AG, a member of German insurer Talanx Group, on Aug. 17 signed a deal to buy a 25 percent stake in Vietnamese insurer PVI Holdings (PVI).
At a value of 93 million USD, the stake equates to 36,000 VND (1.7 USD) per share while PVI closed on Aug. 17's session at its ceiling price of only 16,400 VND. When the deal is completed, PVI will increase its charter capital to 2 trillion VND (97.1 million USD) from 1.6 trillion VND (77.7 million USD).
"Talanx is now our second largest shareholder after PetroVietnam and the only shareholder in the insurance field," said PVI's Chairman Nguyen Anh Tuan.
"We will be represented on the supervisory board as well as the management board. We will share our knowledge of the insurance business for the benefit of both sides," said the German group's chairman Christian Hinsch.
On explaining why Talanx Group chose to be a strategic shareholder of the PVI in the context of a declining stock market, Hinsch said: "We have been investing outside of Germany for more than 30 years, and investing in Vietnam is part of gaining a foothold in the Southeast Asia market."
Vietnam was a dynamic and promising economy, while there was a low penetration rate in the insurance industry, he commented. "We don't look at the moment, but we look at the long-term benefits. That is why we invest," he said, adding that rising and falling was in the nature of a stock market.
Hinsch also described the PVI as a "promising company" to invest in.
Questions were raised as to why the price of the deal was much higher than PVI's market value. In response, Hinsch said that Talanx would be given priority use of PVI's services, and that both sides were implementing provisions for a technical support agreement.
Some also asked if Talanx targeted the PVI because of its dominance in the Vietnamese energy insurance sector. However, Tuan stated that energy insurance accounted for only 30 percent of the company's revenue.
In addition, Hinsch declined to say whether Talanx would buy further shares in the PVI from other foreign investors. "We are happy with our 25 percent at the moment. We don't see a situation arising where we would want to increase our share for the time being, but what is important to us is that we are the only strategic partner in terms of the insurance business."
PVI's general director Bui Van Thuan said that the PVI had no plans to sell more shares to the Oman Investment Fund after this deal, as the company was about to run out of the room for foreign investors. Its Oman partner now holds nearly 10 percent of its capital./.
At a value of 93 million USD, the stake equates to 36,000 VND (1.7 USD) per share while PVI closed on Aug. 17's session at its ceiling price of only 16,400 VND. When the deal is completed, PVI will increase its charter capital to 2 trillion VND (97.1 million USD) from 1.6 trillion VND (77.7 million USD).
"Talanx is now our second largest shareholder after PetroVietnam and the only shareholder in the insurance field," said PVI's Chairman Nguyen Anh Tuan.
"We will be represented on the supervisory board as well as the management board. We will share our knowledge of the insurance business for the benefit of both sides," said the German group's chairman Christian Hinsch.
On explaining why Talanx Group chose to be a strategic shareholder of the PVI in the context of a declining stock market, Hinsch said: "We have been investing outside of Germany for more than 30 years, and investing in Vietnam is part of gaining a foothold in the Southeast Asia market."
Vietnam was a dynamic and promising economy, while there was a low penetration rate in the insurance industry, he commented. "We don't look at the moment, but we look at the long-term benefits. That is why we invest," he said, adding that rising and falling was in the nature of a stock market.
Hinsch also described the PVI as a "promising company" to invest in.
Questions were raised as to why the price of the deal was much higher than PVI's market value. In response, Hinsch said that Talanx would be given priority use of PVI's services, and that both sides were implementing provisions for a technical support agreement.
Some also asked if Talanx targeted the PVI because of its dominance in the Vietnamese energy insurance sector. However, Tuan stated that energy insurance accounted for only 30 percent of the company's revenue.
In addition, Hinsch declined to say whether Talanx would buy further shares in the PVI from other foreign investors. "We are happy with our 25 percent at the moment. We don't see a situation arising where we would want to increase our share for the time being, but what is important to us is that we are the only strategic partner in terms of the insurance business."
PVI's general director Bui Van Thuan said that the PVI had no plans to sell more shares to the Oman Investment Fund after this deal, as the company was about to run out of the room for foreign investors. Its Oman partner now holds nearly 10 percent of its capital./.
