IOOF has agreed to enter into a transaction with ANZ to acquire its OnePath pensions and investments (P&I) and aligned dealer groups (ADG) business for $975 million.
ANZ said it would also enter into a 20-year strategic alliance to make available IOOF superannuation and investment products to ANZ customers.
The ANZ announcement said the aggregate pensions and investments and ADG annual profit was $39 million, and estimated an accounting loss on sale of $120 million.
The four ADGs IOOF will acquire are RI Advice, Millennium 3, Financial Services Partners and Elers Financial Planning, collectively called ANZ Wealth Management.
IOOF said the transaction would allow the firm to become the second largest advice business by adviser numbers and would further strengthen its position as the second largest advice business by funds under advice, and the fifth largest plaform provider in Australia by funds under administration.
IOOF managing director, Chrisopher Kelaher, said the transaction would significantly increase scale, and create value from cost synergies.
ANZ Group executive wealth Australia, Alexis George, said: “By partnering with IOOF, we are able to create greater value for our shareholders while also providing our customers with access to quality wealth products from a specialist
provider with the right cultural fit, financial strength and digital capability".
“The sale of our P&I and ADG businesses provides ANZ with greater flexibility to consider options for the life insurance business including strategic and capital markets solutions," she said.
Pointing to ANZ's insurance business, George said that during the transaction process the firm decided it was better to separate the businesses.
"It gives us a much cleaner look at what we do in insurance. Now, ANZ is still committed to the strategy of not manufacturing insurance. So we need to look for alternatives for insurance. It may take some time. I just want to be clear about that," she said.
"Separating the super business from the insurance business will take some time but once that happens it means we've got a clear life insurance business and thatg ives us much more opportunities than we've got today."