Australian wealth management company AMP has reached an alternative proposition to sell its life business to London-based insurer Resolution Life.
A spokesperson for Resolution Life told International Adviser, that the group – which has been operating since 2003 – has opened a subsidiary in the country called Resolution Life Australia in order to move the deal forward.
AMP Life is now set to be sold for A$3bn (£1.67bn, $2.03bn, €1.81bn), a reduction of A$300m.
The payments will comprise A$2.5bn in cash and A$500m in equity interest in Resolution Life Australia, estimated to be around 20%.
The Aussie wealth manager said it expects the sale to be finalised in the first half of 2020.
Meanwhile, it will continue to report AMP Life’s results until the transaction is completed.
But Resolution will be “on risk of all experience and lapse losses from 1 July 2018 until completion and is entitled to AMP Life net earnings during that period”, AMP said.
The deal is, however, still subject to regulatory approval in Australia and New Zealand.
Bypassing regulatory roadblocks
The original deal was blocked by the Reserve Bank of New Zealand (RBNZ) as Resolution Life did not meet its conditions.
The RBNZ told the UK firm that, in order to successfully meet the criteria, it would need to have separate, ringfenced assets held in New Zealand for the benefit of local shareholders.
As a result, Resolution Life opened an Australian business to meet such conditions.
Clive Cowdery, founder and executive chairman of Resolution Life, said: “I’m delighted that Resolution Life is now present in the Australian and New Zealand market as a partner for insurers, policyholders and advisers.”
AMP is also working with the Chinese regulator regarding its partnership with China Life.
If the acquisition gets a green light in the Asian country, Resolution Life Australia would also receive AMP Life’s holdings in China Life Pension Company.
