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

 

Auckland Port To Recapture Gas: Union Calls On Ports To Stop Spewing Methyl Bromide

The Maritime Union of New Zealand welcomes the decision by Ports of Auckland to stop releasing methyl bromide emissions into the air. The move to fully recapture the toxic gas after fumigation sets a new benchmark for industry best practice. More>>

ALSO:

NZ's Space Programme: Rocket Lab Makes It To Space (But Not Orbit)

Electron lifted-off at 16:20 NZST from Rocket Lab Launch Complex 1 on the Mahia Peninsula in New Zealand. It was the first orbital-class rocket launched from from a private launch site in the world. More>>

ALSO:

Earlier:

Budget: Irrigate (Good Times, Come On!)

Additional grant funding of $26.7 million over the next three years plus a capital boost of $63 million towards irrigation investments in Budget 2017 will deliver economic and environmental benefits through better use of water... More>>

ALSO:

Silver Fern Farms: Proposal To Close Fairton Sheepmeat Plant

Silver Fern Farms has advised its people of the proposal to permanently close the site, and has discussed potential transfer options to its other sites in the region as part of the consultation process...
More>>

ALSO: