Malaysian Wealth Fund Is Said in Talks to Sell Turkish Insurer

(Bloomberg) -- A unit of Malaysia’s sovereign wealth fund plans to sell its Turkish health-insurance business to focus on its home market, according to three people with knowledge of the matter.

Khazanah Nasional Bhd.’s Avicennia Capital hired Barclays Plc to manage the disposal of its Istanbul-based health, life and personal-accident provider, said two people, who asked not to be identified because the process is confidential. Avicennia, which expects as much as $300 million from the sale, will invite potential investors later this month, one person said.

The potential sale of Acibadem Sigorta, formally known as Acibadem Saglik ve Hayat Sigorta AS, comes after Turkish President Recep Tayyip Erdogan last year pushed a range of measures including cheaper health insurance and tax breaks to bolster his support and boost economic growth that slowed in the wake of July’s failed coup. Turkey’s health-insurance premiums increased 19 percent in 2017 to 5 billion liras ($1.3 billion).

Barclays and Khazanah declined to comment, while calls to numbers provided on Acibadem Sigorta’s website weren’t answered.

Acibadem Sigorta is the largest health insurer by premiums in the country after Allianz SE, with an 18 percent market share, according to data from the Turkish Association of Insurance Companies. Turkey’s insurance industry has lured several international investors over the past decade, including Aviva Plc, Cigna Corp., Achmea BV and Sompo Holdings Inc.

Avicennia, the insurance holding unit of Kuala Lumpur-based Khazanah, bought 90 percent of Acibadem Sigorta for $252 million in 2013 from founder Mehmet Ali Aydinlar and Abraaj Capital Ltd. It bought the remainder after the company stopped trading its shares on Borsa Istanbul.

In 2012, the sovereign wealth fund’s IHH Healthcare Bhd. arm bought 75 percent of Acibadem Saglik Yatirimlari Holding AS, which was also founded by Aydinlar. The deal for Acibadem Saglik, then Turkey’s largest hospital chain, valued the business at $1.68 billion.

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