Softlogic Holdings PLC and Fairfax Asia announce that they have signed an agreement to enter into a ten year exclusive general insurance distribution agreement. The consideration payable under this agreement is Rs. 224,000,000.
As part of this transaction, Asian Alliance Insurance PLC announced that it has signed a Share Sale and Purchase Agreement with Fairfax Asia to sell all of the shares that it holds in Asian Alliance General Insurance Limited.
Fairfax Asia may conduct the acquisition either directly or through another nominated member of the Fairfax Group and the purchase price for the said shares is [LKR] 1,266,500,000 which is a value equivalent to 1.7 times the Net Book Value of Asian Alliance General Insurance.
The closing of both of the aforesaid transactions are conditional on the completion of certain customary matters, including approvals by shareholders, regulatory approvals and other necessary third party approvals (as required).
The partnership between Softlogic and Fairfax Asia is expected to provide significant opportunities for both parties as the distribution agreement will permit its licensed insurance subsidiaries to cover hospital chains, retail outlets, shopping malls, automobile distribution, hospitality and electronic distribution of the Softlogic Group. The fast growing life business of Asian Alliance will be retained by the Softlogic Group and distribution of life products will continue across all of the Group’s distribution channels.
“We are extremely pleased to partner with Fairfax Asia, who have a very good track record in General Insurance that we are confident will translate into value addition at our Group channels. Their expertise will build on the great platform that we have established at Asian Alliance General Insurance for the benefit of all stakeholders,” said Ashok Pathirage, Chairman of the Softlogic Group.