Investment manager AMP has announced plans to float its New Zealand wealth management and advice operations next year.
On a standalone basis, the businesses reported operating earnings of around A$40m ($28.2m) in the financial year 2018.
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The firm has not revealed whether to pursue a dual listing on the NZX and ASX or opt for listing on the NZX alone.
The IPO, which is pending regulatory approval, is expected to free up capital and create a standalone entity in New Zealand.
At the same time, AMP also agreed to offload its wealth protection and mature business called AMP Life to Resolution Life in a deal worth A$3.3bn.
The deal consideration includes a cash payment of A$1.9bn, $300m in preference shares in AMP Life, as well as a non-cash component of A$1.1bn that includes an economic interest in mature business and interest in Resolution Life.
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By GlobalDataAs part of the deal, Resolution Life will assume risk and profits of the businesses dating back to 1 July 2018.
Resolution Life executive chairman Clive Cowdery said: “The acquisition of AMP Life is consistent with our strategy to grow the business beyond our traditional markets in Europe and the United States and we see scope for further consolidation in the Australian life market.”
The deal is expected to close in the second half of 2019, subject to regulatory approvals.
Furthermore, AMP has signed an agreement to reinsure its New Zealand retail wealth protection business with Swiss Re, with effect from 31 December 2018. AMP expects the move to free up $150m in capital.
AMP acting CEO Mike Wilkins said: “For customers, there will be no change to their existing insurance policy terms or conditions. They will benefit from Resolution Life’s deep expertise in managing in-force insurance policies and its commitment to customer service.
“For shareholders, the agreement with Resolution Life and our exit from wealth protection and mature delivers important strategic benefits. It substantially simplifies our portfolio, delivers certainty and frees up capital. For employees, it provides certainty of outcome with a business that is culturally aligned with AMP.”
