Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

IAG's Lumley takeover gets final regulatory approval

IAG's Lumley takeover gets final regulatory approval

By Suze Metherell

June 20 (BusinessDesk) - Insurance Australia Group has been given the final regulator's tick to buy Wesfarmers' Lumley general insurance unit, adding to the dominance of New Zealand’s biggest general insurer.

Australia's acting assistant treasurer has approved the transaction, the last sign off needed for Wesfarmers to sell its insurance businesses for A$1.8 billion to IAG, adding the WFI and Lumley Insurance brands to an existing IAG stable which includes NZI, AMI and State.

The sale was subject to a number of conditions precedent including approvals from the Australian Prudential Regulation Authority, Australian Competition and Consumer Commission, Reserve Bank of New Zealand, New Zealand Commerce Commission, and New Zealand Overseas Investment Office.

Earlier this month New Zealand's Reserve Bank it was satisfied Lumley will continue to meet licensing criteria under IAG ownership and in May, the Commerce Commission approved the deal saying it was satisfied the transaction wouldn't substantially lessen competition for personal and commercial insurance products.

The application was opposed by organisations including rival insurer Suncorp, the Insurance Brokers Association New Zealand, Multisure Risk Managers, the Motor Trade Association, Bus and Coach Association, the Rental Vehicle Association, and the Collision Repairs Association. In February, Tower chairman Michael Stiassny told shareholders there was a “significant risk” from the proposed level of market dominance.

Meanwhile, Wesfarmers has also been given the green light by regulators to sell its broking and premium funding units for A$1 billion to Arthur J. Gallagher & Co, the New York stock exchange-listed insurer, completing its exit from the insurance industry.

Wesfarmers said it will have sold A$3 billion of insurance assets for a total pretax profit of between A$1.01 billion and A$1.09 billion. Its brokerage operations generated A$331.1 million in revenue in the year ended June 30, 2013, of which between 40 and 45 percent was derived from its New Zealand operations.

ASX-listed shares in IAG were A$5.88 before the Australian market opened, and have increased 1 percent this year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Superu Report: Land Regulation Drives Auckland House Prices

Land use regulation is responsible for up to 56 per cent of the cost of an average house in Auckland according to a new research report quantifying the impact of land use regulations, Finance Minister Steven Joyce says. More>>

ALSO:

Fletcher Whittled: Fletcher Dumps Adamson In Face Of Dissatisfaction

Fletcher Building has taken the unusual step of dumping its chief executive, Mark Adamson, as the company slashed its full-year earnings guidance and flagged an impairment against Australian assets. More>>

ALSO:

No More Dog Docking: New Animal Welfare Regulations Progressed

“These 46 regulations include stock transport, farm husbandry, companion and working animals, pigs, layer hens and the way animals are accounted for in research, testing and teaching.” More>>

ALSO:

Employment: Most Kiwifruit Contractors Breaking Law

A Labour Inspectorate operation targeting the kiwifruit industry in Bay of Plenty has found the majority of labour hire contractors are breaching their obligations as employers. More>>

ALSO:

'Work Experience': Welfare Group Opposes The Warehouse Workfare

“This programme is about exploiting unemployed youth, not teaching them skills. The government are subsidising the Warehouse in the name of reducing benefit dependency,” says Vanessa Cole, spokesperson for Auckland Action Against Poverty. More>>

ALSO:

Internet Taxes: Labour To Target $600M In Unpaid Taxes From Multinationals

The Labour Party would target multinationals operating in New Zealand to ensure they don't avoid paying tax if it wins power and is targeting $600 million over three years through a "diverted profits tax," says leader Andrew Little. More>>

ALSO: