ANZ offloads super businesses in billion- dollar deal

ANZ will sell its superannuation and some financial planning businesses to financial services group IOOF for $ 975 million as it continues to weigh how best to exit life insurance.

IOOF will pick up the OnePath pensions and investments business along with four aligned dealer groups as ANZ shifts to distributing rather than manufacturing superannuation products.

ANZ, which has been selling assets as chief executive Shayne Elliott refocuses the lender on Australian retail banking, had been reviewing its entire wealth unit before splitting it with a partial sale.

Alexis George, ANZ Wealth Australia group executive, said the lender was still committed to the strategy of not manufac- turing insurance. The deal leaves ANZ with OnePath life insurance and general insurance, group and individual insurance, ANZ Financial Planning and lenders mortgage insurance.

Ms George said the bank, which will sell IOOF products under a 20- year agreement, had increased its options around exiting life insurance manufacturing.

Picking the right option would take some time, she said.

ANZ’s divestment strategy is in line with that of its rivals.

National Australia Bank last year sold 80 per cent of its insurance operations to Nippon Life for $ 2.4 billion and the Commonwealth Bank last month announced it was offloading life insurance to AIA Group for $ 3.8 billion.

Analysts previously estimated the value of ANZ’s entire wealth business at about $ 4 billion.

To help fund the deal, IOOF will sell $ 450 million worth of new shares to institutional investors through a fully underwritten placement, offer extra shares to other investors and take on more debt.

It is expected to wrap up the deal within a year.