Suncorp Group’s stock was arrowed down on ASX today after the company inked a share sale deed with TAL Dai-ichi Life Australia Pty Ltd to sell its Australian life insurance business for total consideration of approximately $725 million.
As recently announced coupled with FY18 results, Suncorp Group Limited have decided to divest their Australian life Insurance business by selling it to TAL. TAL Dai-ichi Life Australia Pty Ltd (TAL) is an Australia’s leading life insurance company which is a subsidiary of world’s largest Japanese insurance group, Dai-ichi Life Holdings.
This sale deed equips TAL to offer market-leading life insurance solutions for 20-year through Suncorp’s Australian digital channels, contact centers, store network and other distribution channels. However, the distribution agreement provides Suncorp to continue earning income on the distribution of life insurance.
With the view to return cash on equity, Queensland-based insurer said it would return approximately $600 million to its shareholders following the settlement of $725 million transaction. “Allowing for separation and transaction costs, provisions and hybrid capital, Suncorp anticipates returning approximately $600 million to shareholders following the completion of the Transaction” the company stated.
Subject to certain conditions and regulatory approvals, the completion of transaction is expected to occur by 31 December 2018.
Following this announcement, Suncorp Group Limited’s stock slipped to $15.310 recording a daily price change of -0.842% on 4 September 2018 (4:24 PM AEST). SUN has observed a positive performance change of 20.31% over the last one year.
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