NAB Announces Wealth Unit Sales Agreement
NAB has entered an agreement to sell its wealth unit to fellow Australian financial firm IOOF for over $1 billion.
NAB has reached an agreement with IOOF to sell MLC Wealth for A$1.44 billion ($1.06 billion) two years after the former first made the decision to offload the business before a management overhaul and industrywide regulatory scrutiny caused delays.
According to a NAB statement, the bank will look to book a post-tax loss of $A400 million ($294.6 million) on the divestment.
IOOF Plans
Wealth manager IOOOF said in a statement that the acquisition would help save costs and expand reach with targets to deliver A$150 million ($110.5 million) in annual pre-tax cost savings by the third full year of ownership.
About A$1 billion ($740 million) of the acquisition, which is expected to be completed by June 30 next year, will be funded through an institutional placement and entitlement offer, with the remaining through debt, a loan note issued to NAB and existing cash.
«The opportunity to acquire a highly complementary business of the quality and size of MLC is compelling. MLC is a natural fit with IOOF and presents a unique opportunity to create value from synergies,» IOOF chief executive Renato Mota said in a statement.
