OCBC has made an offer of S$1.4bn ($1.03bn) to acquire the 11.56% stake in Great Eastern that it does not currently own. The proposed deal aims to strengthen OCBC’s business pillars of banking, wealth management and insurance. Moreover, the move will optimise its capital to enhance shareholder returns. opportunities in one of the world’s fastest-growing regions. The offer is therefore in line with OCBC’s strategy to solidify its wealth management leadership position to drive growth by capturing rising Asian wealth.
OCBC Group CEO Helen Wong said: “The offer is a natural progression of OCBC’s strategy. We have moved intentionally to build up a strong wealth management franchise by hiring the best people and instituting best practices and processes, and raising our investment in Great Eastern. We have been looking at opportunities to best use our capital. We believe the offer allows us to deploy our resources into a key business that is expected to be earnings accretive to OCBC.”
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First announced in 2022, OCBC’s corporate strategy focuses on four growth drivers to capture regional trade, investment and wealth flows. One of the growth drivers is to capture rising Asian wealth with its Singapore-Hong Kong-Dubai hubs and digital propositions.
Rationale for the OCBC offer
As Great Eastern has been part of OCBC’s stable of companies for decades, the companies share a strong synergistic relationship. OCBC is able to customise a full suite of investment, insurance and estate planning solutions for its customers. At the same time, Great Eastern has benefited from its access to OCBC’s extensive retail and commercial customer base.
Wong added: “This is not the first time that make an offer to increase our investment in Great Eastern. The first was in 2004, followed by 2006. OCBC has been the majority shareholder of Great Eastern for the past 20 years. The group has entrenched institutional knowledge and expertise to manage the insurance business. We are confident this exercise complements our One Group, One Brand strategy. This will further accelerate our ambitious wealth management plans. And build even tighter bonds and synergies across all our business pillars and key markets”.
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By GlobalData