Eastspring Investments (“Eastspring”), the Asian asset management business of Prudential plc (“Prudential”), has signed an agreement to acquire 50.1 per cent of Thanachart Fund Management Co., Ltd. (“TFUND”) from Thanachart Bank Public Company Ltd. (“TBANK”) and Government Savings Bank (GSB) 1. Following this acquisition TBANK’s customers will have access to Eastspring’s world class investment solutions.
The consideration for the 50.1 per cent stake is THB 4,208 million (GBP 108 million)2. Completion is conditional on, among other things, regulatory approval and the acquisition of TBANK by TMB Bank Public Company Limited (“TMB”). The two banks signed an agreement to merge on 8 August 2019.
The acquisition of TFUND reinforces Prudential’s commitment to the Thai market and complements Eastspring’s acquisition of 65 per cent of TMB Asset Management (now TMBAM Eastspring) that was completed in September 2018. Similar to the TMBAM acquisition, Eastspring has an option to increase ownership of TFUND to 100 per cent in the future.
TFUND is the 8th largest mutual fund manager in Thailand, with THB 212 billion3 (GBP 5.4 billion) of mutual funds under management. TFUND and TMBAM Eastspring will collectively be the 4th largest asset manager in Thailand with a market share of 12 per cent and a combined AUM of THB 653 billion4 (GBP 16.7 billion).
When the merger of TBANK and TMB is completed, it will become the 6th largest bank in Thailand with 10 million retail customers, more than THB 2 trillion (GBP 51 billion) in total assets, and over 900 branches across the country providing Eastspring access to a large and growing consumer base.
Nic Nicandrou, Chief Executive of Prudential Corporation Asia, said: “As a leading life insurer and asset manager in Asia, Prudential is committed to helping customers protect their health and grow their wealth. By signing this agreement, we are seizing the opportunity to acquire a highly attractive business in the growing Thai market and work more closely with strong partners - TMB and TBANK.
“Following the demerger of the Group’s UK and Europe business, M&GPrudential, Prudential plc will become Asia-led, which means we will be even more focused on meeting the insurance and savings needs of Asian consumers. The acquisition of TFUND not only complements our existing business but allows us to accelerate our growth and extend our presence in this dynamic market.”
Thailand is one of the largest and fastest growing asset management markets in the ASEAN region5 due to an expanding middle class, rising affluence, strong savings culture and low mutual fund penetration rate compared to more developed markets.
Piti Tantakasem, Chief Executive of TMB, said: “With this acquisition, Eastspring has confirmed its commitment to Thailand, and to our partnership. We welcome Eastspring’s expansion in this market and its continued support for our open architecture, which is designed to provide customers of our merged bank with access to world-class products and services.”
Prudential has operated in Thailand for more than 20 years through Prudential Life Assurance (Thailand) Public Company Limited. Prudential serves more than 1.6 million customers in Thailand and manages more than THB 107 billion of assets on their behalf6.
Eastspring is Asia’s leading retail asset manager with USD 216 billion (GBP 169 billion) of assets under management7 and has been operating in Asia for 25 years.
Notes to Editors:
Exchange rates of GBP 1 = THB 39.0592, which is the closing exchange rate as of 30 June 2019, have been used throughout this document.
1 Eastspring will acquire GSB’s entire 25.0% stake in TFUND and a 25.1% stake from TBANK.
2 Based on GBP 1 = THB 39.0592 which is the closing exchange rate as at 30 June 2019.
3 Mutual funds under management as at 31 August 2019.
4 Mutual fund market shares; Mutual fund assets under management as at 31 August 2019.
5 Source: Cerulli Asset Management in Southeast Asia 2019 Report, data as of Dec 2018.
6 As of 30 June 2019.
7 As of 30 June 2019.