Suncorp says it will return $600 million to its shareholders after completing the $725 million sale of its Australian life insurance unit to Japanese-owned TAL Dai-ichi Life.
The company confirmed yesterday that it had signed a share sale deed after first revealing the deal was in the works last month at its full-year results. the signing was promised by the end of August but ran a little late
“Allowing for separation and transaction costs, provisions and hybrid capital, Suncorp anticipates returning approximately $600 million to shareholders following the completion of the transaction,” the company said in a statement to the ASX.
The Share Sale includes a 20-year distribution agreement with TAL to offer market-leading life insurance solutions through Suncorp’s Australian distribution channels, including its digital channels, contact centres and store network. Under the terms of the alliance, Suncorp will continue to earn income on the distribution of life insurance.
Suncorp said the sale of the Australian life insurance business has no impact on the Suncorp life insurance business in New Zealand.
After Suncorp announced the sale last month, its shares jumped to their highest level since 2007.
They closed down 0.7% at $15.33 yesterday. They had risen from $14.83 the day before the sale proposal was revealed with the full year results.
Suncorp will need to keep shareholders happy with the company expected to grab an unwanted starring role before the Hayne Royal Commission which starts its examination of the insurance sector next Monday.
