Finally, Pacmas terminates its proposed insurance merger

Yesterday, PacificMas (“Pacmas”) had announced that it has terminated the negotiations to merge its insurance business with those of GEH's subsidiaries, Great Eastern Life Assurance (Malaysia) Bhd and Overseas Assurance Corporation (Malaysia) Bhd. This proposed merger was first announced on Feb 21, 2003 (go here for the announcement).

This is the second time that Pacmas’ proposal to restructure its core business was not completed. In 1994, its predecessor, The Pacific Bank Bhd had proposed to merge its banking business with the Malaysian banking operations of Oversea-Chinese Banking Corporation Ltd (“OCBC”) but was later aborted. OCBC is the parent of Great Eastern Life Assurance (Malaysia) Bhd as well as being one of the major shareholders of Pacmas.

I’ve highlighted in an earlier post that this proposal is unlikely to succeed. I just wonder why it takes the parties so long to come to this decision or to make this announcement. The interests of the shareholders of Pacmas would have been better served if a quick decision has been forthcoming. Not surprisingly, the announcement did not give any specific reason why the proposal has finally been abandoned.