Tokio Marine to Acquire Majority Stake in Asia General

April 20, 2006

Tokio Marine & Nichido Fire Insurance Co., Ltd., subsidiaries of Japan’s largest insurer (by net premiums written), Millea Holdings, Inc., announced that they have reached an agreement with shareholders holding more than 50 percent to acquire their shareholdings in Asia General Holdings, Limited (AGH), subject to relevant regulatory approvals.

AGH is a leading P/C and life insurer in Singapore and Malaysia. The bulletin announcing the acquisition agreement indicated that, following the preliminary regulatory approvals, “we will seek to ultimately acquire 100 percent interest in AGH.”

Explaining the purpose of the decision, the bulletin noted that the “Millea Group has positioned the Asia region as one of the important areas in the Group’s overseas growth strategy. The Singapore insurance market is viewed as a developed market, but it still shows double-digit growth and continues to show strong future growth potential.

“Malaysia also has strong future growth potential, but due to the current economic policy in Malaysia, the issuance of new licenses for insurance operations is not foreseeable in the near future. Under such circumstances, we determined that this was a rare opportunity to acquire sizeable life and general insurance operations in both countries.”

Tokio and Nichido said they plan to acquire AGH in “three stages.” The first being the purchase of approximately 15 percent of AGH shares for about S$130 million (U.S.$81 million) in late May.

The second stage, which they expect to “take place at the beginning of next year, upon completion by AGH and its subsidiaries of divestitures of certain non-insurance-related assets and return of excess capital to their respective shareholders,” will involve exercising an option to “acquire additional AGH shares to hold a majority interest in AGH, subject to relevant regulatory approvals.”

Upon completion of stage two, Tokio Marine & Nichido expect to “make a tender offer to acquire the rest of AGH shares and the shares of The Asia Life Assurance Society Limited (ALS), AGH’s Singapore life insurance subsidiary, in accordance with relevant regulations.”

The bulletin noted: “Both The Asia Insurance Company Limited (AIS), AGH’s Singapore general insurance subsidiary, and ALS, established in 1923 and 1948, respectively, are two of the oldest insurance companies in the region with long traditions and brand values, and coupled with the Millea Group’s product development skills and through enhancement of marketing network, we expect to expand and strengthen our insurance business operations in the Asia region.”

It also indicated that “ALS has 3 offices in Brunei and has booked gross premium of S$178 million (U.S.$111 million in FY2004 with a market share of 1.6 percent. ALS is rated A+ by S&P.”

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