Suncorp Group Limited To Hold EGM For Approval On Pro-Rata Return Of Capital Following The Sale Of Its Australian Life Insurance Arm

  • Oct 04, 2018 AEST
  • Team Kalkine
Suncorp Group Limited To Hold EGM For Approval On Pro-Rata Return Of Capital Following The Sale Of Its Australian Life Insurance Arm

Suncorp Group Limited (ASX: SUN) intends to hold Extraordinary General Meeting, seeking for the approval of shareholders in respect of pro-rata return of capital and share consolidation on the sale of its Australian life insurance business. The meeting is due to be held on 13 December 2018.

On the receipt of due approvals from company’s shareholders and the respective regulatory authorities, Suncorp Group will return ~$600 million of capital as per its capital management initiative. The action is said to be supported by the sale proceeds of $725 million which is due to be received on the completion of sale transaction of Australian life insurance business with TAL Dai-ichi Life Australia Pty Ltd (TAL).

“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 earlier.

On 9 August 2018, insurer Suncorp Group Limited first announced that it entered into a non-binding agreement to sell its Australian life insurance business to Japanese insurance group’s subsidiary TAL Dai-ichi Life Australia Pty Ltd (TAL) for the total consideration of approximately $725 million. Subsequently on 4 September 2018, the company announced the execution of share sale deed which included a 20-year distribution agreement with TAL.  

Under the terms of agreement, the market-leading life insurance solutions will be offered jointly by Suncorp Group and TAL Dai-ichi through Suncorp’s Australian digital channels, contact centers, store network and other distribution channels. However, it has been told that post alliance Suncorp will continue to earn income on the distribution of life insurance.

TAL Dai-ichi Life Australia Pty Ltd (TAL) is a subsidiary of Japanese life insurance group Dai-ichi Life Holdings. TAL operates within Australia as a life insurance specialist which offers insurance through direct to customer channels, through a financial adviser and via group and workplace superannuation schemes.

The notice of EGM which is scheduled to be held on 13 December 2018, is intended to be sent to SUN’s shareholders in early November 2018. However, the sale transaction is expected to be completed by 31 December 2018, subject to completion of certain conditions and regulatory approvals in Australia and Japan.

The share price of Suncorp group Limited edged up by 1.271% to $14.340 on 4 October 2018 (4:06 PM AEST). In the past one year the stock of insurer Suncorp group has shown a performance growth of 9.15% while it has gone down by 2.31% in the last 3-month period. SUN most recently traded at a PE of 17.230 x with market capitalization of $18.39 billion.

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