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Vietnam: Insurers welcome majority, even 100%, foreign participation

Source: Asia Insurance Review | Sep 2017

Vietnam M&A Regulation

Insurers are keen to have higher holdings in their shares by foreign investors so as to improve ratings and expand their market share.
 
   For instance, at PVI Holdings, shareholders approved a plan to lift the foreign ownership ceiling to 100%. The national oil & gas group PetroVietnam will have to get approval for its plan to divest from PVI. Foreign investors now hold 49% of PVI shares, reported VietnamNetBridge.
 
   At Bao Minh Insurance’s recent annual shareholders’ meeting, a shareholder asked to lift the foreign ownership ceiling to 100%. A member of BMI’s board of directors said the issue needs thorough consideration and the government’s approval. Two foreign shareholders – AXA and First Land – indicated though they do not intend to increase their stakes in the company.
 
   At PJICO, Samsung Fire & Marine Insurance, the foreign strategic shareholder has not mentioned expansion. However, the sale of stakes in the local insurer for the first time to a foreign partner has important significance. 
 
Contributions of foreign investors a big attraction
According to Mr Dinh Thai Huong, PJICO Chairman, one of the reasons for the insurer to sell stakes to foreign investors is to improve the credit rating.
 
   Analysts have commented that the contributions of foreign investors to the insurance market explains why nearly all insurers want to have foreign shareholders, despite worry about hostile takeovers.
 
   The shareholder structure in insurance companies has seen big changes in recent years. Many Vietnamese partners have withdrawn capital from joint ventures, while foreign conglomerates have increased their stakes. A 
 
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