Adelaide-based mutual Lifeplan will become a specialist funds management business under its merger plans with Australian Unity.
The company will take over management of Australian Unity’s investment and funeral bonds operations as part of the deal.
Lifeplan chief executive officer Chris Wright said the combined bond business would have funds under management of $2 billion.
“We were looking at the next development stage of the company and the board canvassed a range of issues for us going ahead,” he said. “These talks led us to consider a merger with Australian Unity.”
Wright said the fact Australian Unity was a mutual was a major consideration and the two companies areas of expertise were not in conflict.
“We have the expertise in bonds while Australian Unity has expertise in other areas of funds management.”
The merger has been approved by both boards, but Lifeplan members will have to vote on the proposal.
Australian Unity group executive for investments David Bryant said Lifeplan members had to vote, as they would be joining Australian Unity.
“Our members do not have to vote but we will be keeping them informed of the proposed merger,” he said.
The merger is also subject to regulatory and court approval, but it is planned to occur before the end of the financial year.
Bryant said there would be opportunities for Australian Unity to offer its services, such as the health fund and other investments, to Lifeplan members.
“There will be opportunities for both companies, as we now have a substantial membership,” he said.
“There will also be efficiencies running the two businesses.”
Wright said while the Adelaide business will remain in the city and its brand retained, he would no longer be running it.
“After 40 years of being involved with Lifeplan I am retiring,” he said.
“I talked it over with the board and my view was there needed to be somebody new to take that big leap forward for the company.”
Wright will be replaced by Lifeplan senior executive Matt Walsh, who in recent years has overhauled the company’s product portfolio and its national expansion program.
Under the merger, Lifeplan’s board of eight will be restructured to have an equal number of Australian Unity and Lifeplan members.
One Lifeplan board member will join Australian Unity’s board.
The merged company will have more than $7 billion of funds under management.
Australian Unity has revenues of more than $600 million and 1,250 staff while Lifeplan employs 130 people.
