Japan’s ITOCHU Corporation has entered an agreement to acquire a minority interest in Thailand-based Thaivivat Insurance Public Company Limited (TVI).
The transaction, announced on Jan. 15, is subject to regulatory approval and is expected to close by February.
According to the Bangkok Post, the news prompted a surge in Thaivivat Holdings’ (TVH) share price, which increased over 5% on the Stock Exchange of Thailand (SET) following the announcement.
TVH, which owns TVI, disclosed in a filing to the SET that its board approved a plan to increase TVI’s registered capital by THB 75.75 million, raising the total to THB 303 million. This will involve issuing 5.75 million new shares at THB 13.66 each through a private placement, with the transaction valued at THB 1.03 billion.
The new shares will be acquired by GR Management (Thailand) Ltd, a subsidiary of ITOCHU Corporation, giving it a 20% stake in TVI.
Despite this investment, TVH will remain the primary shareholder, maintaining a 79.15% ownership in the expanded shareholding structure.
In the filing, TVH president and CEO Jiraphant Asvatanakul said the investment would enhance TVI’s capital base and create opportunities for future growth.
“The potential investment is expected to create business synergy in terms of additional funds and opportunities for future business expansion for TVI’s business,” he said, as reported by the Bangkok Post.
ITOCHU’s interest reflects its confidence in Thailand’s growing insurance market, which offers higher growth potential compared to more mature markets.
Speaking to Nikkei Asia, Kazushi Kawai, general manager of ITOCHU’s insurance business, noted that insurance penetration in Thailand has been increasing steadily, making the sector an attractive investment.
TVI’s business is primarily focused on auto insurance. Market data from 2022 indicated that the insurer held a 3% share of Thailand’s non-life insurance market, ranking 11th among more than 40 providers in the sector.
The planned partnership with ITOCHU is expected to provide TVI with additional resources to support operational growth and expansion initiatives.
Shares of TVH closed at THB 8.55 following the announcement, reflecting investor optimism over the deal.