Australian financial services firm AMP has revised deal to divest its life insurance business to British insurer Resolution Life for A$3bn ($2.03bn).
The revised agreement for the sale of AMP Life (the Australian and New Zealand wealth protection and mature businesses) includes a cash payment of A$2.5bn ($1.69bn) and A$500m ($338.59m) or 20%, equity interest in Resolution Life Australia.
Resolution Life Australia will be a new Australian-domiciled and Resolution Life-controlled holding company, which will assume the ownership of AMP Life.
Resolution Life will be responsible for all experience and lapse losses from 1 July 2018 until completion and is entitled to all AMP Life net earnings during that period.
The Board of AMP noted that disposal of AMP Life provides the best outcome for policyholders, the company and its shareholders and provides a significantly higher cash consideration.
Resolution Life Australia is expected to benefit from AMP’s history and experience in the Australian and New Zealand life insurance market.
The deal is subject to receipt of regulatory approval in Australia, New Zealand and China. It is scheduled to be completed during the first half of 2020.