The total consideration of the sale is expected to be $725 million, Suncorp said in a statement to the ASX.
The sale is expected to result in an after-tax non-cash loss on sale of about $880 million.
Suncorp has announced that, after costs, it will be able to return about $600 million of capital to shareholders.
The means of distributing this capital continues to be through seeking shareholder approval for a pro-rata return of share capital and share consolidation.
Suncorp will commence a 20-year strategic alliance with TAL to offer life insurance solutions through Suncorp’s distribution channels and Suncorp will earn income on the distribution of life insurance issues by TAL.
Suncorp chief executive and managing director Michael Cameron said that partnering with TAL gave Suncorp the opportunity to offer a compelling life insurance solution to its customers.
“The transaction frees-up capital for Suncorp to return to shareholders, and also leverages the strengths of the respective organisations to offer value to Suncorp customers,” Mr Cameron said.
Suncorp will earn income on the distribution of life insurance issues by TAL. Is this not conflicted renumeration?
It sure is conflicted remuneration. ANZ will have similarly conflicted arrangements with the new owners of OnePath, and it is likely CBA and NAB will do something similar for CFS and MLC. This is going to become a big issue moving forward when consumers are duped into thinking they are getting an impartial recommendation from their bank to an independent third party product. In reality it is just vertical integration with smoke and mirrors. Given Hayne’s inaction on vertical integration, it’s time for the ACCC to get involved to save consumers.
Another bank bails out, they ruined a great insurer
There goes the heritage! So much for the lineage dating back to 1834(?) or something equally as mind bending when Sun was the first life policy issuer in Australia. Asteron’s history is now pissed up against the wall for the sake of a few quarters of a good looking balance sheet. Asteron’s spirit and name will cease to exist in a few years and be absorbed into the TAL ‘culture’. Bloody CEO’s and execs making these decisions are hollow people and have nothing by short-termism as their collective mantra. Too sad . . .