The group will offload its Australian and New Zealand wealth protection and mature businesses (AMP Life) and reinsure New Zealand retail wealth protection for total proceeds of $3.45 billion.
AMP will sell its Australian and New Zealand wealth protection and mature businesses via a sale to Resolution Life for total cash and non-cash consideration of $3.3 billion. The transaction is expected to complete in 2H 2019; subject to regulatory approvals.
The group also announced a binding agreement with Swiss Re to reinsure New Zealand retail wealth protection, releasing additional capital of up to $150 million to AMP prior to completion of sale; subject to regulatory approvals.
AMP is also looking to divest it’s New Zealand wealth management and advice businesses via initial public offering (IPO) in 2019 subject to market conditions and regulatory approvals.
Mike Wilkins, AMP’s acting CEO, commented, “The completion of our portfolio review marks a major step forward in reshaping AMP as a simpler, more focused group, that is well positioned to compete in our core markets.
“Delivering the right outcome for customers, shareholders and employees has been our focus throughout the portfolio review.
“For customers, there will be no change to their existing insurance policy terms or conditions. They will benefit from Resolution Life’s deep expertise in managing in-force insurance policies and its commitment to customer service.
“For shareholders, the agreement with Resolution Life and our exit from wealth protection and mature delivers important strategic benefits. It substantially simplifies our portfolio, delivers certainty and frees up capital.”
Following the announcement AMP shares dropped by 18 per cent to a fifteen year low as investors dumped stock.