Duncan will sell shares of United Insurance and United Finance to local entrepreneurs

British conglomerate Duncan Brothers and its partners have decided to divest their investments in United Insurance and United Finance, selling their stakes in both companies.

Several sources at Duncan Brothers (Bangladesh) Limited have confirmed that a group of local entrepreneurs from a “renowned business conglomerate” have signed two share purchase agreements to acquire the shares.

However, the partners of the local conglomerate have asked The Business Standard not to disclose their names until they receive final approval from the relevant authorities.

The conglomerate’s director said: “If our names are revealed, it could affect the share prices of the two companies, potentially derailing our deals.”

Despite several attempts to contact Duncan Brothers executive chairman Imran Ahmed for comment on the reasons for the group’s decision to sell its shares, he did not return calls.

However, a Duncan Brothers official, who wished to remain anonymous, explained that the business environment for insurance and non-banking financial institutions (NBFIs) has deteriorated in recent years.

The official noted that there is an oversupply of insurance companies and NBFIs in the country, and public confidence in the sector has declined due to various irregularities.

“As a result, Duncan Brothers has been trying to exit these sectors for several years,” the official added.

Currently, there are 34 NBFIs and 46 non-life insurance companies operating in the country.

On October 29, the boards of directors of United Finance and United Insurance, representing Duncan Brothers and its partners, decided to sell all of their holdings in both companies.

According to statements received and verified by The Business Standard, share purchase agreements were signed with local businesses on October 30 following the decision.

The statement further said that upon completion of the share sale transaction, the purchasers will be entitled to become directors of United Finance and United Insurance, subject to regulatory approval.

According to shareholder reports of United Finance and United Insurance, Duncan Brothers – a subsidiary of UK-based Camellia Group – and its partners, including Lawrie Group, own 34.91%, or 6.53 crore shares, in United Finance, as well as 53.23% , or 2.36 crore shares of United Insurance.

As of Thursday, United Insurance shares were trading at Tk 41.70 and United Finance shares were trading at Tk 15.70 on the Dhaka Stock Exchange.

Based on these prices, the estimated transaction value will be around Tk 200 crore.

Duncan Brothers was founded 150 years ago, at a time when the tea industry was just beginning to flourish. Naturally, the company turned its attention to tea.

Over the next century and a half, Duncan Brothers went through numerous changes, including partnership changes, ownership changes and mergers, before eventually becoming part of Lawrie Group Plc and eventually Camellia Plc.

Tea remained its core business until 1985, when the company began diversifying by founding United Insurance and United Finance.

United Insurance, the general insurer, paid a 10% dividend to its shareholders last year and posted a net profit of Tk 7.91 crore.

In addition, United Finance paid a cash dividend of 6% in 2023, compared to Tk 14 million it reported this year.