AMP’s life sale scuttled
AMP’s $3.3 billion sale of its life business to Resolution Life has been put on hold following action by the Reserve Bank of New Zealand.
On Monday, AMP said that Resolution Life told AMP that RBNZ would not consider Resolution Life’s change of control application unless it agreed to have separate, ringfenced assets held in New Zealand for the benefit of New Zealand policyholders, which is inconsistent with the current branch structure.
As a result, Resolution Life does not expect RBNZ to approve an application that would satisfy the condition precedent.
In a statement, AMP said that addressing these requirements would adversely impact the commercial return of the sale for both AMP and Resolution Life.
“The failure to meet this condition precedent is exceptionally disappointing as the sale of AMP Life is a foundational element of AMP’s strategy,” AMP said.
Recognising that the transaction is unlikely to proceed in its current form, AMP is now working with Resolution Life to determine whether there is a solution that addresses policyholder interests, regulatory requirements and provides certainty of execution.
This will require negotiation of new terms and is not certain.
Given the uncertainty around the AMP Life transaction, the AMP Board expects to continue its prudent approach to capital management and anticipates that an interim dividend will not be paid for the first half of 2019.
A further update will be provided at its first half results in August.