Insurance Australia Group (IAG) AU$1.85bn takeover of Wesfarmers' insurance underwriting business has received the required regulatory approval from the Commonwealth Acting Assistant Treasurer.
Australian acting Assistant Treasurer Mathias Cormann has approved the deal, which comes after earlier approvals from the Australian Competition and Consumer Commission and New Zealand regulators in May this year.
Earlier, the Australian Competition and Consumer Commission had announced that it will not thwart IAG’s takeover of the Australian underwriting operations of Wesfarmers’ insurance division.
IAG managing director and CEO Mike Wilkins said this concludes the regulatory approval process, and clears the way for completion of the acquisition.
"IAG is looking forward to welcoming the employees and customers of the Wesfarmers insurance underwriting businesses.
"This acquisition is a compelling strategic fit for IAG which will enable us to create a market-leading commercial lines position in Australia, sustain our market-leading position in New Zealand, and deliver significant long-term value for our shareholders," Wilkins added.
The company expects the transaction to complete on 30 June 2014.
Wesfarmers would be able a book a pre-tax profit of between A$700m to A$750m on the sale, which will be included in its 2014 fiscal results.
In December 2013, IAG signed an agreement to purchase Wesfarmers’ Australian and New Zealand underwriting operations for A$1.85bn, which was subject to regulatory approvals in both countries.
The acquisition includes Wesfarmers’ underwriting companies that are trading under the WFI and Lumley Insurance brands, along with a ten-year distribution agreement with Coles.
Image: IAG, Wesfarmers AU$1.85bn deal obtains final regulatory approval .Photo courtesy of stockimages/ FreeDigitalPhotos.net.