Resolution Life Australasia (RLA) to Resolution Life Group for a total value of A$524 million deal (£287 million, $387 million, €336 million). The sale of RLA will bring AMP’s withdrawal from its previous life insurance and mature company, AMP Life, to a close. Resolution Life purchased AMP Life in 2020 for a total value of A$3 billion, along with the equity stake in RLA.
The withdrawal was negotiated prior to the expiration of the 18-month standstill period specified as part of the 2020 sale, and the RLA share was valued at its carrying value in AMP’s financial statements as of 30 June 2021. Additionally, AMP and RLA also agreed to resolve several post-closing adjustments and certain disputes between the parties as part of the transaction, which are subject to certain limits and exclusions, resulting in a net payment of A$141 million from AMP to RLA.
According to AMP’s statement last week, “The company had partly provisioned for these items but following the acceleration of this settlement will record an additional one-off expense of approximately A$65m in FY 21”. The withdrawal, which is anticipated to close in the first half of 2022, is still awaiting regulatory clearances in Australian and New Zealand.
AMP CEO, Alexis George, announced the closure of the business. He said, “This divestment brings to a close our long and proud involvement in life insurance in Australia and New Zealand. It enables us to realise capital to further strengthen our balance sheet ahead of our demerger and continue supporting our businesses”. He added, “The separation of our businesses is progressing well and will continue until mid-next year as planned. We will continue to provide transitional services to RLA, as agreed, and will have a shared customer and adviser connection into the future.” According to AMP, “The company would continue to invest in the transformation and growth of its wealth management and bank businesses”.
