Affin Bank has signed a business transfer deal that will merge its Malaysian general insurance business, also known as AXA Affin General Insurance (AAGI), with Generali Asia.

As a result of the merger, Affin Bank will hold a 30% stake in the expanded insurance company, while Generali will control the remaining 70%, the bank said in a bourse filing. The proposed merger is expected to complete in the first quarter of 2023.

This comes after Generali acquired AXA’s insurance joint ventures with Affin in Malaysia, namely AAGI and AXA Affin Life Insurance.

Following the transaction, AAGI will be rebranded and come under the Generali Malaysia umbrella by early next year. This will result in Generali becoming the second-largest P&C insurer in Malaysia, in terms of market share.

Italy-headquartered Generali’s acquisition is part of its push to enlarge its footprint in emerging markets in Asia, such as Malaysia. On the other hand, French insurer AXA has retreated from several markets in the region, with HSBC acquiring its Singapore business and Gulf Insurance Group snapping up its operations in several Middle Eastern markets.