NAB's Aviva acquisition to go to ACCC
The National Australia Bank is set to become the overwhelming entity in the Australian wealth management space on the back of its acquisition of the Aviva Australia wealth management business, including Navigator.
The acquisition will now be subject to regulatory approvals, including by competition regulator the Australian Competition and Consumer Commission.
Subject to those approvals, the transaction is expected to be completed by the fourth quarter of this year.
The transaction, announced to the Australian Securities Exchange today, has been valued at $825 million and has prompted NAB chief executive Cameron Clyne to suggest that it will be earnings per share and return on equity accretive in the first full year.
He said as well, the acquisition met the objectives of NAB’s broader strategy, within which the MLC and NAB wealth management businesses were deemed a key area of growth.
NAB group executive for wealth in Australia Steve Tucker said the Aviva acquisition would further develop the group’s retail live insurance business while the Navigator investment platform would enhance its scale in the market.
“Aviva has strong relationships [and] an understanding of the external financial adviser market and we are committed to continuing to support those advisers with quality insurance and investment products,” he said.
Announcing the acquisition, Aviva valued the transaction at $925 million, comprising $825 million in cash, a further $40 million representing a dividend to be paid by Aviva Australia prior to completion and a forecast amount of $60 million representing a net asset adjustment to be paid post completion.
It said the sale supported Aviva’s strategy of focusing on the key growth markets in Asia where leading positions can be achieved. The decision to sell these businesses is based on the belief that it would be challenging to reach a leading position in Australia in the foreseeable future in an increasingly consolidated market.
Aviva currently ranks ninth in the life market and its wealth management platform is ranked eighth.
AUTHOR
Mike Taylor
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