AMP has agreed to sell its 19.13% equity interest in Resolution Life Australasia (RLA) for a consideration of A$524m (£287m, $387m, €336m) to Resolution Life Group.
The sale of the RLA will complete AMP’s exit from its former life insurance and mature business, AMP Life, which it sold to Resolution Life in 2020 for a total consideration of A$3bn, including the equity interest in RLA.
The divestment has been agreed ahead of the expiry of the 18-month standstill period agreed as part of the 2020 sale, and values the RLA stake at its carrying value in AMP’s accounts at 30 June 2021.
As part of the sale, AMP and RLA have also agreed to settle a number of post-completion adjustments and certain claims between the parties, subject to various limitations and exclusions, which has resulted in a net payment of A$141m to RLA from AMP.
AMP said in a statement on 3 November that it “had partly provisioned for these items but following the acceleration of this settlement will record an additional one-off expense of approximately A$65m in FY 21”.
The divestment, which is expected to complete in the first half of 2022, remains subject to regulatory approvals in Australia and New Zealand.
End of an era
Alexis George, AMP chief executive, said: “This divestment brings to a close our long and proud involvement in life insurance in Australia and New Zealand. It enables us to realise capital to further strengthen our balance sheet ahead of our demerger and continue supporting our businesses.
“The separation of our businesses is progressing well and will continue until mid-next year as planned. We will continue to provide transitional services to RLA, as agreed, and will have a shared customer and adviser connection into the future.”
AMP said that it will “continue to invest in the transformation and growth of its wealth management and bank businesses”.
