(Bloomberg) -- Singapore lawmakers passed an amendment to a bill that will effectively block Allianz SE’s proposed S$2.2 billion ($1.7 billion) acquisition of a majority stake in a local insurance firm.
Under the amended Insurance Act, the country’s financial regulator will now need also need the relevant government ministry’s approval in order to greenlight transactions that involve insurers that are co-operatives or are linked to co-operatives.
The move comes two days after the government — in a rare move — said it wouldn’t be in the public interest for the Income Insurance Ltd. transaction to go ahead in its current form. It wasn’t satisfied the firm can continue to fulfill its social mission as a cooperative after the acquisition.
“We are making the amendments on an urgent basis because the proposed transaction is under active consideration by Income’s shareholders,” Chee Hong Tat, Minister for Transport and deputy chairman of the Monetary Authority of Singapore, told parliament on Wednesday.
In July, Allianz said it planned to buy at least 51% of Income from NTUC Enterprise Co-operative Ltd. The deal sparked a firestorm of criticism after it was announced, with many in Singapore complaining how it could lead to higher insurance premiums and betrays Income’s roots to help middle to lower-income Singapore workers.
Chee, who’s also Second Minister for Finance, stressed that the government isn’t concerned about Allianz’s standing or suitability as a buyer, but rather the terms and structure of this specific transaction.
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