Deal subject to regulatory approvals in Australia, New Zealand and China
Commonwealth Bank of Australia (CBA), the parent company of ASB Bank Limited (ASB), is to sell its New Zealand life and health insurance business (Sovereign) and life insurance business in Australia (CommInsure Life) to AIA Group Limited (AIA) for A$ 3.8 billion (about $4.16 billion).
The sale agreement includes a 20-year partnership with Sovereign and AIA for the provision of life and health insurance products to ASB customers in New Zealand and life insurance products to CBA customers in Australia.
Senior partner Pip Greenwood is leading the Russell McVeagh team advising CBA on the New Zealand component of the Transaction, working closely with the CBA legal team, including CBA’s Head of Advisory and M&A Legal, Mark Alexander, and Kirsty Cox of CBA’s Advisory and M&A Legal Team.
Herbert Smith Freehills is advising CBA on the Australian component of the Transaction, and JP Morgan and FNZC are acting as financial advisers.
Milestone for CBA
“The sale represents an important strategic milestone for CBA as it looks to enhance the financial wellbeing of customers while creating value for shareholders. It has been a pleasure to work collaboratively alongside the team on this significant transaction – the combined operations from this transaction will make AIA a market leader in both New Zealand and Australia,” Ms Greenwood said.
Sovereign customers will retain all the current benefits of their existing policies, with the Transaction allowing customers to have continued access to life and health insurance products through ASB, with the addition of AIA solutions to the offerings. AIA is the largest independent publicly listed pan-Asian life insurance group and has well established life insurance businesses in Australia and New Zealand.
Conditions of Transaction
The Transaction is subject to certain conditions and regulatory approvals in New Zealand, Australia and China, and expected to be completed in calendar year 2018.
Russell McVeagh is at the forefront of New Zealand’s major transactions and widely recognised as New Zealand’s market leader. This deal is another example of the firm’s role in the country’s most significant and complex deals.
The NZX and ASX announcements can be viewed on their respective websites.
Russell McVeagh acts on New Zealand’s most significant and complex transactions and in the last year these have included the first and only NZX listing of 2017 – the dual listing of Oceania Healthcare on the NZX and ASX, the largest takeover in New Zealand since 2006 and first acquisition of a New Zealand listed company via scheme of arrangement under new regime for schemes – acting for Allnex New Zealand on its acquisition of Nuplex Industries via High Court approved scheme of arrangement, and the first major demerger in New Zealand given effect by way of a scheme of arrangement since Telecom and Chorus’ 2011 demerger – the Trustpower demerger.