ANZ has finally completed the $2.85 billion sale of its Australian life insurance business to Swiss giant Zurich.
The sale of the OnePath Life unit was first announced 18 months ago.
ANZ will still provide life insurance products through various bank channels, but they will be supplied by Zurich under a 20-year agreement.
“The completion of this sale demonstrates a significant step in our strategy to simplify ANZ while also providing ongoing support for our customers who want protection with life insurance solutions,” ANZ wealth executive Alexis George said in yesterday’s statement.
“Importantly, current ANZ and OnePath life insurance customers will continue to receive the same high-quality service and solutions from Zurich, a global insurer with a strong track record of service and innovation.”
ANZ shares fell 1.2% to $27.54 in yesterday’s general sell-off. They had closed on Friday at $27.88 which was 2% less than they were when the Zurich sale was announced in December 2017.
ANZ and IOOF are still talking with each other and IOOF with the regulator, APRA about the same of the wealth superannuation business.
ANZ agreed to sell IOOF its financial planning and pensions business, which includes 700,000 super fund members, in late 2017 for $975 million.
IOOF has completed the acquisition of ANZ’s three financial planning licensees but is yet to finish off the OnePath acquisition which will be the major test for the deal’s completion.
ANZ and the board of its independent OnePath trustee need to be assured that the sale would meet their duty to operate in the best interest of OnePath members.
Both companies have now set mid-October as the deadline for the deal to be done as IOOF faces a long delay from APRA. If approvals are not received from ANZ, the board of its independent OnePath trustee and APRA by that October deadline, the deal is dead in its present form.
IOOF said last month that amendments to superannuation laws that take effect from July 1 will give the Australian Prudential Regulation Authority (APRA) “an approval power” over the acquisition of the ANZ OnePath Pensions and Investments (P&I).
APRA launched legal action last December against the then chair and CEO of IOOF and other three other senior managers at IOOF. The regulator is seeking to have all five banned from working in the superannuation industry. IOOF says the claims will be defended vigorously.
The company has also received ’show cause’ notices from APRA over delays to its restructure which will also be defended.
Market analysts do not expect the deal to proceed because APRA and the OnePath trustee will not sign off or approve the sale.
