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Listed financial services giant reports deal flop
A blue chip in many investors portfolio, AMP Ltd has announced that the sale of AMP Life to Resolution Life is unlikely to proceed on the current terms due to regulatory challenges.
Listed financial services giant reports deal flop
A blue chip in many investors portfolio, AMP Ltd has announced that the sale of AMP Life to Resolution Life is unlikely to proceed on the current terms due to regulatory challenges.
In a statement to the ASX this morning, AMP advised that there are challenges in meeting the conditions set by the Reserve Bank of New Zealand’s approval.
This condition requires RBNZ approval of a change of control for AMP Life in a form consistent with the current branch structure, which exempts AMP Life from a number of New Zealand legislative requirements.
Addressing the requirements is believed by AMP to adversely impact the commercial return of the sale for both AMP and Resolution Life.
The sale of AMP Life was a foundational element of AMP’s strategy in a move to simplify the operations of the group.
AMP had originally announced the sale for $3.3 billion, being made of $1.9 billion in cash, $300 million in preference shares and a $1.1 billion economic interest in Resolution Life.
In a statement to the ASX, AMP stated it was working with Resolution Life to determine whether there was a solution that would address policyholder interests, regulatory requirements and certainty of execution, but this will mean negotiation of new terms.
The AMP Ltd board will review any revised transaction to ensure it is in the best interests of policyholders, the company and shareholders.
On news of the announcement, as well as interim dividend being scrapped, the wealth management giant fell by 14 per cent to $1.85 a share as of 10.40am.
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