Suncorp shareholders have pledged their overwhelming support for the proposed $7.9 billion merger with Promina.
At a Suncorp shareholder meeting yesterday, 94.2 per cent voted for the deal. The next step will be a second hearing at the Federal Court of Australia on March 12.
“In October 2006 we advised the market of our intention to merge with Promina to create the second largest domestic insurer in both Australia and New Zealand,” Suncorp managing director and chief executive officer John Mulcah said.
“Promina’s strong suite of brands, including AAMI, APIA, Shannons, Just Car Insurance, Vero and AA insurance, complement the Suncorp and GIO brands and together give us an unrivalled portfolio to target well-defined customer segments.”
The merger of Suncorp and Promina’s life insurance businesses will create Australia’s seventh largest life insurance business. The combined group will have about $24 billion in funds under management.
Independent experts Grant Samuel and Associates ruled the merger was in the best interests of Promina shareholders. It attributed a value, being 0.26 Suncorp shares and $1.80 cash, of $7.10 to $7.20. This consideration is at the upper end of the assessed underlying value of Promina shares of $6.46 to $7.33.
The merger will achieve pre-tax savings of $225 million. But, expected pre-tax integration costs have risen from the original estimation of $40 million to $355 million.
It has clearances from the Australian Competition and Consumer Commission, Australian Prudential Regulation Authority, the Federal Treasurer in Australia and the Overseas Investment Office in New Zealand.
