The transaction is set to be completed by the second half of 2021.
Westpac Group is selling its general insurance arm to Allianz for $535.16m (A$725m), according to a press release.
The group is also entering into an exclusive 20-year agreement with Allianz for the distribution of general insurance products to Westpac’s customers.
The transaction includes contingent payments subject to integration milestones and business performance over the next five years, as well as ongoing payments in accordance with the distribution agreement, according to Westpac.
The sale price represents a multiple of 1.3x FY20 gross written premium and is estimated to result in a small post-tax gain on sale in FY2021.
The deal is expected to be completed in the second half of 2021.
Westpac will reportedly retain responsibility for certain pre-completion matters and provide protection to Allianz via a combination of provisions, warranties and indemnities.
(A$1 = US$0.74)
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