Oversea-Chinese Banking Corp.’s final attempt to fully control Great Eastern Holdings Ltd. with its S$900 million ($704 million) bid will be tested on Tuesday, capping a two-decade quest by Singapore’s second-largest lender to take over the insurer.
OCBC is just 6.28% shy of complete ownership, and Great Eastern’s minority shareholders will vote at an extraordinary general meeting whether to delist the 117-year-old firm with an improved bid from the bank. If rejected, OCBC’s so-called ‘exit offer’ will lapse, paving the way for the insurer’s shares to resume trading.
Acquiring Great Eastern, one of the largest insurers in Singapore and Malaysia, will boost OCBC chief executive officer Helen Wong’s strategy to build an integrated financial services group that will better capture growth in the region’s booming wealth management sector. The insurer has total assets of more than S$100 billion with 16 million-plus policyholders—complementing the bank’s business.
“The transaction is to streamline the group structure and we also think it opens up the potential to manage group capital more efficiently,” said Jayden Vantarakis, head of equity research for Southeast Asia at Macquarie Capital. Still, a full takeover would have a minimal impact on earnings or strategy as OCBC is already in control, he said.
Trading in Great Eastern’s shares has been suspended since July 2024 after OCBC failed to secure a sufficient level for a delisting or compulsory acquisition with last year’s offer. While the bank raised its bid by 17.8% last month to S$30.15 a share, the price is still at a discount to the insurer’s 2024 embedded value of S$38.08 per share.
That metric has been used to value insurers elsewhere and has been cited by resistant minority shareholders urging a higher offer.
Great Eastern’s independent directors have advised shareholders to accept OCBC’s bid, which has been described by the firm’s financial adviser EY as “fair and reasonable.”
The insurer has contributed an average of about S$700 million a year in net profit to OCBC over the past 10 years, translating to an average of about 15% of OCBC’s annual net profit over this period, the bank has said.
While delisting Great Eastern has been a long-term goal for OCBC, the bank is satisfied with its 93.72% stake, regardless of the outcome of the EGM, it said in a statement last month. OCBC does not intend to launch another offer in the foreseeable future, it added.