Wesfarmers is selling its Australian and New Zealand underwriting insurance business to Insurance Australia Group for $1.845 billion, in a move (if approved) likely to strengthen IAG’s position in the market.
The underwriting operations include the Lumley and WFI brands.
The deal is subject to approval from a number of regulatory bodies including the Australian Competition and Consumer Commission and the Australian Prudential Regulatory Authority.
If the deal is approved, Wesfarmers said in a statement to the Australian Securities Exchange It would make a before-tax profit of between $700 and $750 million.
Managing director Richard Goyder says the sale of the business is consistent with Wesfarmers’ focus of long-term portfolio management.
“We believe this sale agreement is in the best interests of our shareholders, while offering the customers of our underwriting businesses the opportunity to become part of an established leading insurance organisation.”
Aurizon announces $150 million asset write-down
Australia’s largest rail listed company Aurizon Holdings has announced an asset write-down of between $130 million to $150 million in the first half, after deciding to reduce its trains and wagons and end a joint venture with Surat Basin Rail.
In a statement to the ASX, Aurizon said it would incur the one-off asset impairment as a result of selling or disposing of 181 locomotives and 2675 wagons.
By 2017-2018, Aurizon said it intends to reduce its fleet of locomotives by 29% to 598 and its wagons by 12% to 16,292.
The locomotives will be sold or scrapped and the wagons reduced to scrap value.
Shares steady on open
Aussie shares have opened this morning virtually unchanged, despite an early sell-off in banking and resources shares.
The S&P/ASX 200 benchmark was up 0.4 points to 5098.8 at 12:14pm AEDT. On Friday, the Dow Jones closed 15.93 points higher, up 0.1% to 15,755.36.