AMP and Resolution Life rescue saleAugust 13 2019 by Andrew Tjaardstra
Last month Australian wealth manager AMP had said it would likely end the A$3.3 billion (US $2.3 billion) sale of its life insurance unit in Australia and New Zealand after an intervention by New Zealand’s regulator.
However, in a revised deal Resolution Life will take on the risk for all claims and insurance losses from July until the acquisition of AMP Life is completed – likely in the first half of 2020.
Resolution will be entitled to all AMP Life’s profits during the perio while Resolution will pay AMP A$2.5 billion in cash, and a A$500 million equity interest in its new Australian business – which will own AMP Life.
The A$500 million is expected to provide AMP a 20% share in the business.
AMP and Resolution are still working with the Reserve Bank of New Zealand to address its concerns over the sale.
The central bank did not approve the sale last month, after it warned Resolution it would have to separate and “ringfence” AMP’s New Zealand assets for the benefit of New Zealand policyholders.
Overall AMP made a A$2.3 billion first half loss in the first half of the year and sees the sale of the business as a key element of turning around the business.
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