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Report: Prudential, Great Eastern in talks to sell stakes in Malaysian units

U.K.-based Prudential Plc and Great Eastern Holdings Ltd. are in talks to sell a 30% stake each in their Malaysian insurance units to comply with the country's foreign ownership rules, Reuters reported March 7, citing “people familiar with the matter.”

Malaysia's foreign ownership rules require foreign companies to reduce stakes in their Malaysia-based insurance units to 70% before June.

Prudential Assurance Malaysia Bhd. is in advanced talks with Malaysia's pension fund Kumpulan Wang Persaraan to divest a 30% stake, the people said, adding that the discussions are not exclusive. Details of a possible deal could be finalized as early as this month. Prudential's 30% stake in the Malaysian unit is valued at US$435 million, Reuters noted. The U.K.-based insurer could also weigh a listing of its unit on the Malaysian stock exchange to divest the stake, said the people.

Kumpulan Wang Persaraan CEO Wan Kamaruzaman Wan Ahmad told the news outlet that the fund has submitted an offer to buy a stake in the Prudential unit, but declined to give details. Prudential did not comment on the matter, but said it was committed to its local business.

Meanwhile, Great Eastern is in talks with Malaysia's state pension fund Employees Provident Fund to sell a 30% stake in its wholly owned Malaysian unit, Great Eastern Life Assurance (Malaysia) Bhd., people familiar with the matter told Reuters.

A Great Eastern Holdings spokeswoman reiterated the company's prior statement that it was assessing possible options relating to a minority stake in its Malaysian unit to comply with foreign ownership rules. Employees Provident Fund declined to comment on the matter.