BREAKING NEWS: Decision through on global broker acquisition

BREAKING NEWS: Decision through on global broker acquisition | Insurance Business

BREAKING NEWS: Decision through on global broker acquisition
All regulatory approvals have been granted for the sale of Crombie Lockwood to Arthur J Gallagher & Co to go ahead.

The deal, which forms part of the sale of Wesfarmers’ insurance broking and premium funding operations to the US broking giant, is set to be completed on or before 30 June 2014.

Wesfarmers managing director Richard Goyder welcomed the confirmation of the regulatory approvals.

“On completion, the transaction will deliver value to our shareholders and will afford customers and employees of the insurance broking and premium funding businesses the opportunity to join a leading global insurance broking company with ambitions to expand in Australia and New Zealand,” Goyder said.

Wesfarmers announced in April that it had agreed to sell the insurance broking and premium funding operations of its insurance division to subsidiaries of Arthur J Gallagher & Co for A$1,010 million.

In addition to the purchase price, Wesfarmers will receive a distribution of approximately A$150 million to repay funding of the premium funding operations.

The sale was subject to a number of conditions precedent including obtaining approvals from the Foreign Investment Review Board in Australia, Overseas Investment Office in New Zealand and the Financial Conduct Authority in the United Kingdom.

These approvals have been progressively achieved since the transaction announcement.

On completion of the transaction, Wesfarmers expects to record a pre-tax profit on sale of approximately A$310 to $335 million, which will be included in the financial results for the 2014 financial year.