The government assessed the proposal and decided it wouldn’t be “in the public interest” for the Income Insurance Ltd deal to proceed in its current form, the culture, community and youth minister Edwin Tong told parliament today.

Tong said the government isn’t satisfied that Income can fulfil its social mission as a co-operative after the acquisition.

“We are nonetheless open to any new arrangement which Income may wish to pursue, whether with Allianz or any other partners, so long as the concerns highlighted are fully addressed,” he said.

Allianz and Income Insurance didn’t immediately respond to requests for comments on the latest development.

In July, the German company said it planned to buy at least 51% of Income from NTUC Enterprise Co-operative Ltd to strengthen its presence in Asia.

The proposed S$2.2 billion (US$1.7 billion) transaction drew criticism after it was announced.

Monetary Authority of Singapore board member Chee Hong Tat said in Parliament in August that the fostering of a competitive insurance market with financially strong insurers was a key part of the regulator’s approach to ensure that insurers operate sustainably and serve the public well.

Tong said that the government’s move doesn’t mean Singapore is closing its doors on foreign investment.

For Income, he said it makes sense for the firm to look into a partnership with a strong party with a global presence and strong networks.

“Don’t read into this as suggesting that we’re not open to a foreign entity partnering with Income, or indeed, whether it’s Allianz, or indeed, any other entity,” he said.