The Commonwealth Bank and AIA Australia have entered into further arrangements in a bid to complete the prolonged transaction around the sale of CommInsure, involving a $150 million reduction in the original sale price.
The Commonwealth Bank has announced to the Australian Securities Exchange (ASX) that a revised transaction path comprising a joint cooperation agreement, reinsurance arrangements, partnership milestone payments and a statutory asset transfer.
The announcement said the aggregate proceeds for CBA from the transaction were expected to be $2,375 million – a $150 million reduction from the original sale price.
It said the arrangements were expected to be implemented in a staged manner through the current financial year, with the Commonwealth Bank to receive approximately $750 million of proceeds and distributions by the end of the first half and the remaining amount by the end of the financial year.
The announcement said the two parties had also agreed to grant AIA an option to extend the respective Australia and New Zealand distribution agreements from 20 years to 25 years.