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Report: AMMB Holdings mulls sale of general insurance unit stake

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Report: AMMB Holdings mulls sale of general insurance unit stake

Malaysia-based AMMB Holdings Bhd. is considering selling its stake in unit AmGeneral Insurance Bhd., in a bid to exit its noncore businesses and focus on its main banking operations, Reuters reported Dec. 13, citing "three people with knowledge of the development."

The general insurance unit could be valued at US$400 million to US$500 million, according to the sources, who declined to be identified as they were not authorized to speak with the media on the matter.

AMMB may launch a formal auction process for its 51% stake in AmGeneral Insurance in early 2018, the sources added. Insurance Australia Group Ltd., which holds the remaining 49% in the unit, may also off-load its stake as part of the sale process.

Potential bidders for the unit could include large foreign general insurers with existing operations in Malaysia, as well as Chinese insurers, two of the sources said.

The sale process, however, may not be completed any time soon, and the two shareholders could opt to drop their sale plans if bids for the unit do not match their expectations, one of the sources noted.

Both AMMB and IAG declined to comment on the matter. A spokeswoman from IAG, however, referred Reuters to comments made by CEO Peter Harmer at the insurer's annual shareholder meeting in October, when he said the company may not make further investments in Asia in the short term as it had not been able to find the right circumstances to do so.