ANZ today announced it had reached agreement with ING Group to acquire ING Group’s 51% shareholdings in the ANZ-ING wealth management and life insurance joint ventures in Australia and New Zealand for A$1,760 million. ING Australia Limited (INGA) and ING (NZ) Holdings Limited (ING (NZ)) will become wholly- owned subsidiaries of ANZ on completion.
The acquisition reflects an opportunity to bring certainty to the future of the joint ventures between ANZ (49%) and ING Group (51%) that were established in 2002.
Cash purchase price for the ING Group’s 51% holdings in INGA and ING (NZ) of A$1,760 million equates to around 11 times normalised 2008 earnings and 1.2 times 31 December 2008 embedded value.
ANZ Chief Executive Officer Mike Smith said: “Moving to full ownership of the wealth management and life insurance joint ventures significantly strengthens our position in wealth management with a business we know well. The transaction is consistent with our strategy. It brings certainty to our wealth management position through ownership of an established specialist wealth management and protection business with a 120-year history in Australia, most recently as ING and previously as Mercantile Mutual.”
“Moving to full ownership means we can more closely integrate our retail banking and wealth businesses within ANZ and deepen relationships with our customers. Importantly, for INGA and ING (NZ) customers there will be no change to the policy commitments and service arrangements. The businesses will also continue their long-standing commitment and business relationships with professional financial advisers and will continue to be a vocal advocate for the value of quality advice.”
As part of the transaction, ANZ has agreed to enter into transitional service arrangements with ING Group. This includes continued use of the ING brand for a period of up to 12 months while future branding is determined. ANZ will continue to use ING Investment Management as its preferred provider of asset management services in the medium term. In New Zealand, the acquisition includes the ING New Zealand investment management business and two property trusts.
In connection with the transaction, ANZ has also agreed to purchase ING Group’s interests in the ING (NZ) Diversified Yield Fund and Regular Income Fund in New Zealand for A$55 million. Completion will be subject to regulatory approvals in Australia and New Zealand and is anticipated in the fourth quarter of 2009.