SINGAPORE-Malaysian state investment firm Khazanah Nasional Bhd. is poised to buy Turkish insurer Acibadem Sigorta Insurance for as much as US$300 million, as part of efforts to expand its presence in emerging insurance markets, people with knowledge of the matter said Friday.

A deal is likely to be signed “very soon,” one of the people said.

Khazanah’s move reflects strong interest in emerging-market insurance and banking sectors by foreign investors from everywhere from Singapore to Canada. Turkey offers especially promising opportunities, with a robust economy, an expanding middle class and a relatively untapped insurance market.

Acibadem Sigorta is one of Turkey’s five largest insurance companies, providing life, health and personal accident products. It is owned by a 50-50 joint venture between Dubai-based Abraaj Group and Mehmet Ali Aydinlar-the same parties who sold a 75% stake in Turkey’s Acibadem Hospital chain to Khazanah in 2011 for more than US$1 billion.

Acibadem Sigorta officials weren’t immediately available for comment. An external spokeswoman for Abraaj Group in Dubai declined to comment.

Global companies have snapped up emerging-market insurance and banking assets the past year. Japanese companies Mitsubishi UFJ Financial Group Inc. 8306.TO -4.70% and Sumitomo Mitsui Financial Group Inc., for example, this year bought stakes in banks in Thailand and Indonesia, respectively. Meanwhile, U.K.-based Prudential PLC and Japan’s Dai-ichi Life Insurance Co., among others, have bought insurance assets in Southeast Asia.

In Turkey, Singapore state investment firm Temasek Holdings Pte. late last year bought shares in Turkiye Halk Bankasi AS, the country’s second-biggest state-owned bank by assets, during a secondary public offering, people with knowledge of the matter said earlier. In September, Russia’s Sberbank, majority-owned by the central bank, acquired Turkey’s DenizBank AS, a privately owned lender.

In March, Allianz SE, Europe’s largest insurer by market value, paid around 684 million euros (US$878 million) for a 94% stake in Yapi Kredi Sigorta A.S., the insurance business of Yapi Kredi Bank, Turkey’s No. 4 private bank by assets.

Turkey’s insurance market offers plenty of opportunity for growth. In 2011, insurance premiums as a percentage of gross domestic product were among the lowest of all emerging markets, according to data from the Insurance Association of Turkey. The association has forecast nonlife premiums in Turkey to grow fourfold by 2023, which would make it the world’s 16th-largest market, up from 28th in 2010.

Last year, insurance premiums in Turkey totaled 19.8 billion lira (US$10.8 billion), according to the association.

Khazanah has also been buying assets. Earlier this year, it teamed up with Canada’s Sun Life Financial Inc. to buy a 98% stake in Malaysian life insurer CIMB Aviva Malaysia for US$596 million. It had also considered buying a 15% stake in Thai Life Insurance Co., but backed out due to valuation issues, one of the people with knowledge of the deal said.

Khazanah was also one of the parties interested in GE Capital’s 25% stake in Bank of Ayudhya, Thailand’s fifth-largest bank, which finally went to Japan’s MUFG.

Khazanah’s assets had reached 121.4 billion ringgit (US$38 billion) at the end of last year, more than twice the 50.9 billion ringgit it had in May 2004. It recorded a net gain of 15.7 billion ringgit for 2012 through divestments in 55 assets while investing in 95. As of the end of last year, 18.4% of its portfolio was invested in financial institutions.

BY P.R. VENKAT

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