Suncorp Group has announced it has signed a share sale and purchase agreement with Australia and New Zealand Banking Group Limited (ANZ) to sell its banking business for $4.9 billion, $1.3 billion of which is goodwill and is expected to yield net proceeds of $4.1 billion.
Suncorp’s insurance operations in both Australia and New Zealand will not form part of the Transaction and the Group’s head office will continue to be in Queensland.
The Bank will continue to operate under the Suncorp Bank brand pursuant to a licensing agreement between ANZ and the Group for a period of 5 years post completion.
The Transaction continues the reshaping and simplification of the Suncorp Group, and positions both the insurance and banking businesses for ongoing growth and success, benefiting employees, customers and other stakeholders.
The Transaction includes various post completion and transitional arrangements aimed at maintaining and enhancing the customer proposition of Suncorp Bank, and of course the transaction is subject to a range of regulatory approvals from the Federal Treasurer and the Australian Competition and Consumer Commission.
ANZ has indicated its intention to run the Bank as a separate business to minimise disruption and support the Bank’s ongoing growth for at least the following three years. The Transaction creates an opportunity to accelerate the plan for Suncorp Bank under ANZ’s ownership.
The Transaction also supports the ongoing transformation of Suncorp’s insurance businesses as it builds on its leading market positions and scale in attractive and growing segments in Australia and New Zealand.
Suncorp Chair Christine McLoughlin said: “This proposal has been assessed through the lens of creating value for shareholders and, just as importantly, to ensure there is alignment of purpose and values and positive outcomes for our people and customers. Both businesses will benefit from a singular focus on their growth strategies and investment requirements.”
Suncorp Group CEO Steve Johnston added: “As a dedicated insurance business we will be singularly focused on meeting the needs of our customers and communities at a time when the value of insurance has never been greater. We acknowledge the needs of insurance customers are rapidly changing, with a preference for digital interactions and for product design to take into account personal circumstances and risk profiles.”