Singapore blocks Income-Allianz deal due to social concerns

Government cites public interest and social mission concerns.

The Singapore government has blocked the $1.7 billion deal by Allianz to buy Income Insurance, citing concerns over the impact on Income’s social mission and the protection of public interest.  

“The protection of public interest” was central to the government’s decision, said Prof. Lawrence Loh, Department of Strategy and Policy at NUS Business School. He highlighted two key issues: the historical context of Income Insurance and the uncertainty around maintaining its social mission under new ownership.  

“One is, of course, if you look at the history of Income Insurance, they were cooperative before, and then they became corporatized,” Loh explained. In 2022, a $2 billion surplus was allocated to the cooperative societies movement, exempted from distribution to shareholders.  

“This amounts to the tune of $1.85 billion to be returned to the shareholder. So in other words, this is something like a value capture from something that is public money to shareholders,” he said.  

The second critical factor was the uncertainty about the future of Income’s social mission under Allianz’s ownership. “After the acquisition, it is not clear. In fact, it’s not properly defined how the social orientation of the new entity being acquired by Allianz will carry up this social purpose,” Prof. Loh added.  

The government’s intervention, Loh said, serves as a reminder that companies pursuing acquisitions in Singapore must go beyond financial considerations.

“Foreign investments coming to Singapore, especially if they want to pursue the acquisition route, have to weigh the social factors very carefully. This will be shown to be not only financially oriented in terms of their thinking, but they actually should be socially responsible,” he said.  

This case serves as a reminder that companies must be “sensitive to the requirements of the marketplace” when planning mergers, he said, underscoring the need to balance financial goals with public and social responsibilities.