logo
  

Westpac To Sell Life Insurance Services To TAL Dai-ichi Life Australia In A$900 Mln Deal

Australia's Westpac Group (WBC.AX,WBK) announced Monday that it has agreed to sell Westpac Life Insurance Services Limited to TAL Dai-ichi Life Australia Pty Limited, a unit of life insurer Dai-ichi Life Group.

The companies will also enter an exclusive 20-year strategic alliance for the provision of life insurance products to Westpac's Australian customers.

The sale price is A$900 million. In addition, the transaction includes ongoing payments to Westpac.

Completion of the transaction is expected to occur in the second half of the 2022 calendar year, subject to various regulatory approvals.

With the sale, Westpac will exit manufacturing life insurance products and release significant capital back to the bank. The total accounting loss on sale is approximately A$1.3 billion post-tax.

The deal will add around 12 basis points to Westpac's Level 2 common equity Tier 1 capital ratio.

The company expects a post-tax loss of about $0.3 billion, reflecting predominantly transaction and separation costs, is expected to be realised in its fiscal 2021 results, while the balance of the loss will be recognised on completion of the sale.

Westpac said it will retain responsibility for certain pre-completion matters and provide protection to TAL through a combination of provisions, warranties and indemnities.

The deal is part of its plan to simplify its business portfolio, including announcements on the sale of its Lenders Mortgage Insurance, Westpac Pacific, Auto Finance and New Zealand Life Insurance businesses along with the recently completed separation of its General Insurance and Vendor Finance businesses.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT