ASX-listed Freedom Insurance Group announced yesterday that it has entered into an agreement for the acquisition of St Andrew's Insurance from regional lender Bank of Queensland (BOQ).
The deal includes a three-year distribution agreement for the provision of life insurance products to BOQ customers.
Freedom CEO and Managing Director, Keith Cohen, said the acquisition of St Andrew’s was a unique opportunity to expand manufacturing and distribution while establishing underwriting capability and accelerating diversification into a broader range of insurance products. Mr Cohen noted that the transaction combines Freedom’s expertise in product design and direct sales with St Andrew's’ leading position in corporate distribution and life insurance underwriting.
The acquisition price is A$65 million (US$50.6 million) with BOQ expecting the sale to result in a post-tax gain of about A$8 million to be recorded in its full-year results. The deal is expected to be completed in the second half of this year.
The sale follows similar moves by ANZ, Commonwealth Bank and National Australia Bank to cut their exposure to wealth management.
BOQ CEO Jon Sutton said the transaction made "strategic sense" for both parties.
"St Andrew's has made a strong contribution to the BOQ group since its acquisition in 2010, but industry and business dynamics have changed dramatically in recent years," Mr Sutton said.
"These changing conditions now mean St Andrew's is a better long-term strategic fit for Freedom."
Freedom is an ASX-listed listed insurance group specialising in developing, distributing and administering life insurance products in Australia.