Wesfarmers’ A$1 billion insurance sale to NYSE-listed
Gallagher gets regulator clearances
By Suze
Metherell
June 12 (BusinessDesk) – Wesfarmers has been
given the green light by regulators to sell its broking and
premium funding units for A$1 billion to Arthur J. Gallagher
Co, the New York stock exchange-listed insurer, completing
the Australian company’s exit from the insurance
industry.
The Perth-based company expects to make a pretax
profit of between A$310 million and A$335 million from the
transaction after approvals from the Overseas Investment
Office, Foreign Investment Review Board in Australia and the
UK’s Financial Conduct Authority.
Wesfarmers will get a
further A$150 million distribution to repay premium funding
as part of the sale, which includes its Crombie Lockwood,
Lumley Finance and Monument Premium Funding brands in New
Zealand.
Illinois-based AJG is also acquiring
Wesfarmers’ OAMPS Insurance Brokers in Australia, the
country’s largest insurance broker, and OAMPS UK.
The
sale will complete Wesfarmers’ divestment of its insurance
division. It sold its Australian and New Zealand
underwriting businesses, WFI and Lumley Insurance, last year
for A$1.85 billion to Insurance Australia Group, which
operates the State, NZI and AMI brands and is New
Zealand’s largest general insurer.
Last month, the IAG
deal was approved by New Zealand antitrust regulators as
well as the Australia Competition and Consumer Commission
and is now awaiting signoff from the Australian Prudential
Regulation Authority and Federal Treasurer.
Wesfarmers
said it will have sold A$3 billion of insurance assets for a
total pretax profit of between A$1.01 billion and A$1.09
billion. Its brokerage operations generated A$331.1 million
in revenue in the year ended June 30, 2013, of which between
40 and 45 percent was derived from its New Zealand
operations.
AJG operates in 26 countries and is one of the
world’s largest risk management and insurance broking
companies, according to its
website.
(BusinessDesk)
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