Commonwealth Bank of Australia (CBA), the parent company of ASB Bank Limited (ASB), is to sell its New Zealand life and health insurance business (Sovereign) and life insurance business in Australia (CommInsure Life) to AIA Group Limited (AIA) for A$3.8b (the Transaction).
The sale agreement includes a 20-year partnership with Sovereign and AIA for the provision of life and health insurance products to ASB customers in New Zealand and life insurance products to CBA customers in Australia.
Senior partner Pip Greenwood is leading the Russell McVeagh team advising CBA on the New Zealand component of the Transaction, working closely with the CBA legal team, including CBA's Head of Advisory and M&A Legal, Mark Alexander, and Kirsty Cox of CBA's Advisory and M&A Legal Team. Herbert Smith Freehills is advising CBA on the Australian component of the Transaction, and JP Morgan and FNZC are acting as financial advisers.
"The sale represents an important strategic milestone for CBA as it looks to enhance the financial wellbeing of customers while creating value for shareholders. It's been a pleasure to work collaboratively alongside the team on this significant transaction – the combined operations from this transaction will make AIA a market leader in both New Zealand and Australia," Ms Greenwood says.
Sovereign customers will retain all the current benefits of their existing policies, with the Transaction allowing customers to have continued access to life and health insurance products through ASB, with the addition of AIA solutions to the offerings. AIA is the largest independent publicly listed pan-Asian life insurance group and has well established life insurance businesses in Australia and New Zealand.
The Transaction is subject to certain conditions and regulatory approvals in New Zealand, Australia and China, and expected to be completed in calendar year 2018.
Russell McVeagh is at the forefront of New Zealand's major transactions and widely recognised as New Zealand's market leader. This deal is another example of the firm's role in the country's most significant and complex deals.
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