By Stuart Condie
SYDNEY--Westpac Banking Corp. has agreed to sell its general insurance business to Allianz SE for 725 million Australian dollars (US$534.4 million).
Australia's second-largest bank by market capitalization on Wednesday said the sale price represents a multiple of 1.3x the unit's fiscal 2020 gross written premium. The sale will add about 12 basis points to its common equity Tier 1 capital ratio, the lender said.
Westpac said it will enter into an exclusive 20-year agreement to distribute Allianz products to bank customers. The transaction includes contingent payments subject to integration milestones and business performance over the next five years, as well as ongoing payments relating to the distribution agreement.
Westpac has distributed Allianz products including auto and travel insurance since 2015.
"This transaction is another step in simplifying our business," Westpac Chief Executive Peter King said.
Westpac earlier this year prepared the business for divestment by separating it into a new specialist businesses division along with its superannuation operations and wealth platforms.
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(END) Dow Jones Newswires