TAL Dai-ichi Life Australia (TAL) has signed a non-binding heads of agreement to acquire Suncorp’s Australian life insurance arm in a deal worth around A$725m ($537.8m) following a strategic review of the Suncorp business.
As part of the divestiture, Suncorp will ink a 20-year partnership to distribute TAL life insurance products to its customers.
According to Suncorp CEO and managing director Michael Cameron, the deal will simplify Suncorp’s business model and will also be accretive to earnings.
“The long-term strategic alliance between TAL and Suncorp will allow us to offer excellent value to Suncorp’s Australian customers. The strategic alliance will leverage the strengths of our respective organisations to deliver a superior customer experience,” Cameron noted.
Suncorp expects to book non-cash loss of A$880m through the sale as well as return around A$600m to shareholders.
The companies are expected to ink binding agreements soon. The deal is slated to be wrapped up by the end of this year, subject to regulatory nod.
TAL group CEO and managing director Brett Clark said: “This transaction will significantly expand TAL’s market leading presence in Australia and will provide exciting opportunities for us with additional trusted and recognised brands, and a broader group of financial advisers.
“This acquisition will enhance TAL’s scale and capability across the retail, group and direct segments, and will open up important new distribution channels. It will provide us with a strong base for continued growth and reflects our ongoing commitment to offering Australians a range of life insurance options to meet their diverse needs.”