Allianz SE agreed to buy HSBC Holdings Plc’s Singapore insurance unit for S$2.7 billion ($2.1 billion), marking a substantial expansion less than two years after another deal in the city-state fell apart.

The two firms also agreed to enter a 15-year exclusive distribution partnership, allowing Allianz to provide insurance and other solutions to HSBC’s customers in Singapore, according to a statement released Friday. Bloomberg earlier reported that Allianz was the frontrunner to purchase the unit.

The transaction comes after Allianz withdrew an offer to buy a majority stake in Income Insurance Ltd. for about S$2.2 billion in December 2024. At the time the Singaporean government said the purchase shouldn’t proceed on the proposed terms, dealing a setback to Chief Executive Officer Oliver Baete’s effort to grow in Asia.

“Singapore serves as our Asia-Pacific headquarters and is central to our global growth strategy,” Baete said in the firm’s release on Friday. Singapore “is a nation that cares deeply about the well-being of its people.”

Read more: Allianz Withdraws $1.63B Offer for Singapore’s Income Insurance

Allianz’s shares were up 0.4% at 9:37 a.m. in Frankfurt, while HSBC was trading 1.2% higher in London.

The Allianz deal signals confidence in the market’s wealth-management growth, Bloomberg Intelligence analyst Steven Lam wrote on Friday. The new annual premium equivalent in Singapore is set to rise 15% or more in 2026, he added.

Adding the business would make Singapore one of the biggest markets in Allianz’s life and health segment in Asia, Lam had previously said.

For HSBC, the sale is part of the banking group’s efforts to simplify operations under CEO Georges Elhedery, who has cut management layers, jobs and businesses. The London-based lender said it expects the disposal to generate a pretax gain of $1.8 billion.

HSBC has previously said it’s committed to Singapore as an international wealth and wholesale banking hub.

The deal is expected to be completed in the first half of 2027, subject to regulatory approvals.

Photograph: An illuminated Allianz SE logo on the company’s offices at dawn in the La Defense business district in Paris, France, on Thursday, Jan. 21, 2021; photo credit: Benjamin Girette/Bloomberg

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Topics Mergers & Acquisitions Carriers