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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 , the country’s financial regulator will now also need the relevant government ministry’s approval 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 Å˽ðÁ«´«Ã½Ó³»­ 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.

Singapore Blocks $1.7 Billion Allianz-Income Å˽ðÁ«´«Ã½Ó³»­ Deal

“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.

“Control of such carefully nurtured national treasures should never be passed on to foreigners,” Neil Parekh, a nominated member of parliament, said during a debate over the bill.

During the debate that lasted for nearly four hours, opposition politicians also questioned how information sharing about the deal within the government fell short and whether local investors would be willing to shore up Income instead.

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.

“The action highlights the importance the government places on the continuation of Income Å˽ðÁ«´«Ã½Ó³»­’s social mission,” said Kanishka de Silva, a director in Fitch Ratings’ Asia-Pacific Å˽ðÁ«´«Ã½Ó³»­ team. “It will be key for a potential acquirer to demonstrate that they will address any concerns the government or regulators may have around this.”

Photograph: The offices of Allianz SE in the La Defense financial district of Paris, France, on Thursday, Oct. 7, 2021. Photo credit: Nathan Laine/Bloomberg

Topics Allianz