National Australia Bank to buy Aviva Australia
National Australia Bank has agreed to buy Aviva Australia, Australian insurance and wealth management business for $825 million. This acquisition is expected to be earnings per share and return on equity accretive in the first full year following acquisition (excluding estimated integration costs).
NAB won the bidding process for Aviva’s assets, with AMP missing out. Chief executive Cameron Clyne said NAB is looking to expand its MLC division’s business and that the acquisition would help it in this regard.
This acquisition also will enhance National Bank offering in key wealth management segments including insurance and investment platforms, adding scale, efficiency and new capabilities to their operations. The company said it plans to use the funds to cut down its debts, which currently stand at about $4.9 billion.
National Bank Australia will become the Australia biggest life insurer and investment platform provider after buying Aviva Australia Holdings for $825 million.
Aviva currently ranks ninth in the Australian life insurance market and its wealth management platform is ranked eighth. National Bank’s Aviva takeover, which is subject to approval of the Australian Competition and Consumer Commission (ACCC), is part of Mr Clyne’s refocus on the Australian market as he seeks to reverse the bank’s slide in profitability and return to shareholders.