IOOF Holdings Limited (ASX: IFL) provided an update on the acquisition of ANZ’s wealth businesses in which the company announced that the ANZ has agreed an amendment to its contracts with IOOF for the sale of its Pensions & Investments (P&I) business that will allow for the legal separation of its P&I business. Following this news, the share price of IFL increased by 2.773 percent and the share price of ANZ increased by 0.67 percent as on 15 January 2019.
In the announcement IOOF informed that, after the recent actions by the Australian Prudential Regulation Authority (APRA), ANZ has agreed for changes in the Sale agreements of its Wealth Businesses to accommodate the anticipated delays. The completion of the acquisition by IOOF is now expected to occur later in 2019.
As per the announcement, ANZ has agreed to enable the completion of a Successor Funds Transfer (SFT), which is necessary to separate the ANZ P&I business products from OnePath Life, to be completed independently of the completion of the P&I Acquisition by IOOF.
Due to the amendment in the transaction contract, the acquisition is now subject to the approval of OnePath Custodians and ANZ. ANZ has agreed that the coupon rate of 14.4 percent per annum on the debt note subscribed by IFL from ANZ in October 2018 will only be paid once the SFT is completed. As per the announcement, Successor Funds Transfer is expected to be complete by 1 July 2019.
While providing this update, IFL’s acting CEO Renato Mota told that IFL will keep on working towards the effective completion of the initiatives which were announced earlier with respect to the APRA license conditions. The management of the company is confident that the acquisition will occur shortly after the SFT completion. Renato Mota also informed that IFL will continue to work cooperatively and constructively with ANZ in order to complete the acquisition of ANZ’s Pensions & Investments (P&I) business. The acquisition is subject to the P&I Independent Trustee and ANZ providing consent to transfer the business to IOOF.
ANZ Deputy CEO Alexis George told that the contract amendment allows ANZ to continue the work to separate its wealth businesses, while also allowing the P&I Independent Trustee appropriate time to consider its consent to that acquisition. ANZ today informed that the sale of its OnePath Life (OPL) to Zurich Financial Services Australia could happen independently of the transaction with IFL. It is expected that the sale of OPL will occur in the first half of CY 2019.
Meanwhile, in the last six months, the share price of IOOF Holdings Limited decreased by 41.32 percent as on 14 January 2019. IFL’s shares traded at $5.560 with a market capitalization of circa $1.9 billion as on 15 January 2019. ANZ’s shares witnessed a fall of 12.34 percent in the past six months as on 14 January 2019 and traded at a PE ratio of 11.450x. ANZ’s shares traded at$25.540 with a market capitalization of circa $72.8 billion as on 15 January 2019.
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