Title : AMP $3.3b life insurance sale unlikely to go ahead, dividend scrapped
link : AMP $3.3b life insurance sale unlikely to go ahead, dividend scrapped
AMP $3.3b life insurance sale unlikely to go ahead, dividend scrapped
AMP has said the $3.3 billion sale of its life insurance arm to a foreign buyer was unlikely to proceed as planned and that it had scrapped its interim dividend.
AMP said in a statement on Monday morning that the sale of its wealth protection business to London-based Resolution Life is "unlikely to proceed in its current form" because it is unlikely to get approval from New Zealand's central bank.
Resolution Life said it had been told the Reserve Bank of New Zealand would not consider the required change of control application unless the company altered its current branch structure to include separate, ringfenced assets "for the benefit of New Zealand policyholders".
"AMP believes that this reflects RBNZ's position and that addressing these requirements would adversely impact the commercial return of the sale for both AMP and Resolution Life," ANZ said.
"The failure to meet this condition precedent is exceptionally disappointing as the sale of AMP Life is a foundational element of AMP's strategy."
It said since the transaction was "unlikely to proceed in its current form", AMP was now working with Resolution Life to "determine whether there is a solution that addresses policyholder interests, regulatory requirements and provides certainty of execution".
"This will require negotiation of new terms and is not certain," ANZ said.
The company said the outcome would also impact the dividend paid to shareholders.
"Given the uncertainty around the AMP Life transaction, the AMP Board expects to continue its prudent approach to capital management and anticipates that an interim dividend will not be paid for 1H 19," it said.
AMP chairman David Murray had defended the $3.3 billion sale of the firm's life insurance business, despite critics slamming it as a "blatant destruction of shareholder value".
Some institutional shareholders of AMP have slammed the transaction, including fund manager Merlon Capital Partners, which owns 25 million shares.
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