AMP Life sale ‘unlikely to proceed’

AMP Limited has advised that the sale of AMP Life to Resolution Life is unlikely to proceed on the current terms due to regulatory challenges.

In a statement to the ASX this morning, AMP advised that there were challenges in meeting the condition precedent for the Reserve Bank of New Zealand’s approval.

This condition requires RBNZ approval of a change of control for AMP Life in a form consistent with the current branch structure, which currently exempts AMP Life from a number of New Zealand requirements.

Resolution Life has notified AMP that RBNZ would not consider a change of control applications unless it agreed to have separate ringfenced assets held in New Zealand for the benefit of New Zealand policyholders.

This change would be inconsistent with the current branch structure and as a result Resolution does not expect for its application to be approved that would satisfy the condition.

Addressing the requirements is believed by AMP to adversely impact the commercial return of the sale for both AMP and Resolution Life.

Advertisement
Advertisement

The sale of AMP Life was a foundational element of AMP’s strategy in a move to simplify the operations of the group.

AMP had originally announced the sale for $3.3 billion, being made of $1.9 billion in cash, $300 million in preference shares and a $1.1 billion economic interest in Resolution Life.

The wealth giant confirmed in January that the sale was still on track to be completed by the second half of this year, but that now appears to be in doubt.

AMP said it was working with Resolution Life to determine whether there was a solution that would addresses policyholder interests, regulatory requirements and certainty of execution, but this will mean a negotiation of new terms.

The AMP Limited board will review any revised transaction to ensure it is in the best interests of policyholders, the company and shareholders.

If no revised transaction can be achieved and receive regulatory approval then AMP will retain AMP Life and manage it as a specialist life insurance and mature business with a focus on policyholder outcomes, costs and capital efficiency.

AMP Life sale ‘unlikely to proceed’
AMP
ifa logo
Eliot Hastie

Eliot Hastie

Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms. 

Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.

Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).

You can email him on: [email protected]

Subscribe to the ifa bulletin

Receive daily online news,analysis, reports and business strategies
By signing up you agree to our Terms of Use and Privacy Policy

from the web

Website Notifications

Get notifications in real time and stay up to date with content that matters to you.