Malaysian sovereign wealth fund Khazanah Nasional Berhad is considering divesting 51% stake in Sun Life Malaysia, its insurance joint venture with Canada’s Sun Life Assurance, The Edge reported, citing unnamed sources.
Investment bankers have reportedly been engaged to identify potential buyers for the stake as Khazanah evaluates its position amid headwinds facing the insurance sector.
Sun Life Malaysia, which is 49% owned by Sun Life Assurance Company of Canada, has two core entities. Sun Life Assurance Malaysia held assets worth 3.58 billion ringgit ($842 million) as of June 2024, while Sun Life Malaysia Takaful had 3.22 billion ringgit ($757 million) in assets during the same period.
Industry sources cited by the report suggested the planned divestment is driven by growing challenges in the insurance market, including margin pressures, regulatory shifts, and evolving consumer demands.
As a life insurance and family takaful provider, Sun Life Malaysia offers a range of products and services to Malaysians across the country.
The divestment comes after Khazanah said it will further diversify its global portfolio but expects a difficult year in 2025 following a drop in profit for 2024.
Khazanah said its 2024 profit from operations fell to 5.1 billion ringgit ($1.15 billion) from 5.9 billion ringgit in 2023. Net asset value grew 22.2% to 103.6 billion ringgit in 2024 from 84.8 billion ringgit a year earlier.
Khazanah’s portfolio includes Malaysia’s second-largest lender, CIMB Group, electricity utility Tenaga Nasional, and national carrier Malaysia Aviation Group. It invests in sectors ranging from energy and healthcare to information technology and real estate, according to its website.
In March, Khazanah acquired Innovation Network Corporation of Japan’s (INCJ) stake in telecommunications infrastructure company EDOTCO Group. The financial details of the deal were not disclosed.
