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AMP Says Life Unit Sale 'unlikely' To Proceed; Scraps Interim Dividend

Australian wealth manager AMP Ltd. (AMLTF.PK, AMP.AX) said that the sale of AMP Life, the Australian and New Zealand wealth protection and mature businesses, to Resolution Life is unlikely to proceed on current terms due to the challenges in meeting the condition precedent for Reserve Bank of New Zealand or RBNZ approval. AMP scrapped its interim dividend.

In late 2018, AMP agreed to sell AMP Life to Resolution Life for about A$3.3 billion or $2.3 billion.

On Saturday, Resolution Life notified AMP that RBNZ would not consider Resolution Life's change of control application unless it agreed to have separate, ringfenced assets held in New Zealand for the benefit of New Zealand policyholders, and Resolution Life does not expect RBNZ to approve an application that would satisfy the condition precedent.

AMP today said," The failure to meet this condition precedent is exceptionally disappointing as the sale of AMP Life is a foundational element of AMP's strategy."

AMP noted that it is now working with Resolution Life to determine whether there is a solution that addresses policyholder interests, regulatory requirements and provides certainty of execution. This will require negotiation of new terms and is not certain.

AMP said it expects to continue its prudent approach to capital management and anticipates that an interim dividend will not be paid for first-half of 2019, due to the uncertainty around the AMP Life transaction.

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