IAG is moving towards completion of its exit from Asia with a deal agreed that will allow the firm to sell its joint venture holding in Malaysia.

AmGeneral Holdings Berhad, owned 49% by IAG and 51% by AMMB Group (AMBank), has signed an agreement for the sale of the insurance business to Liberty Insurance Berhad.

Liberty will acquire all the shares in AmGeneral under the proposed transaction, with AmBank to end up holding a 30% interest in the insurance operations, while IAG will exit with expected sale proceeds of $340 million.

The deal, to be completed this financial year, is conditional on the Malaysian High Court approving a capital reduction and distribution of sale proceeds to IAG and is subject to clearances from Bank Negara Malaysia and the Minister for Finance.

IAG entered Malaysia in 2006 through an initial 30% interest as part of a previous Asia expansion strategy that also targeted India, Thailand, Vietnam, Indonesia and China.

In 2018 the company launched a strategic review of the region’s businesses, leading to the sale of interests in India, Thailand and Indonesia. The Malaysian joint venture was its largest remaining investment in Asia, while it still has small interests in China and Vietnam.

IAG expects to incur a $90 million impairment in the fiscal 20021 results, reflecting the asset being classified as “held-for-sale”, while a $150 million regulatory capital increase is expected following completion.