Arch Capital Group Ltd. (NasdaqGS:ACGL) entered into a share purchase agreement to acquire Westpac Lenders Mortgage Insurance Limited from Westpac Banking Corporation (ASX:WBC) on March 17, 2021. The sale price will be at book value which will be determined at completion. The transaction also includes small, fixed annual payments to Westpac over the next 10 years. As part of the agreement, Westpac Lenders will retain its existing risk in force and become Westpac's exclusive provider of lenders mortgage insurance (LMI) on new mortgage originations for a period of 10 years. Westpac will retain responsibility for certain legacy matters and provide protection to Arch through a combination of customary warranties and indemnities. Upon completion of the transaction, Arch intends to combine the operations of Westpac Lenders and its existing Australian LMI company, Arch LMI Pty Ltd.

The transaction is subject to antitrust and regulatory approvals from Australian Prudential Regulation Authority (APRA), and from the Australian Competition and Consumer Commission. The transaction is expected to close by the end of August 2021. The transaction is expected to close by end of September 2021. Completion is scheduled on September 30, 2021. Westpac will record a loss on sale in FY21 from separation and transaction costs along with the AUD 84 million write down in goodwill. The transaction is expected to add approximately 7bps to Westpac's Common Equity Tier 1 capital ratio. Credit Suisse acted as financial advisor; KPMG acted as tax advisor; and Clyde & Co acted as legal advisor to Arch Capital. Andrew Hirst, Ryan Leslie, and Adrian O'Shannessy of Herbert Smith Freehills acted as legal advisors to Westpac Banking Corporation.

Arch Capital Group Ltd. (NasdaqGS:ACGL) completed the acquisition of Westpac Lenders Mortgage Insurance Limited from Westpac Banking Corporation (ASX:WBC) for approximately AUD 350 million on August 31, 2021. Ernst & Young Global Limited acted as financial advisor and due diligence provider to Westpac Banking Corporation in the transaction.