(Reuters) – Wealth manager IOOF Holdings Ltd (IFL.AX) said on Monday it would acquire National Australia Bank Ltd’s (NAB) (NAB.AX) wealth management business for A$1.44 billion ($1.06 billion), to help save costs and expand its reach.
NAB, Australia’s third-largest bank by market capitalisation, decided in 2018 to divest MLC Wealth, but delayed plans due to a management overhaul and a government-appointed inquiry into the financial services sector that found industry-wide misconduct.
IOOF in a statement said it expects the acquisition to be completed by June 30, 2021, and that it would deliver A$150 million of annual pre-tax cost savings by the third full year of ownership.
“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 the statement.
IOOF said it would fund about A$1 billion of the deal value through an institutional placement and entitlement offer, while the rest would be via debt, a loan note issued to NAB and existing cash.
In a separate statement, NAB said it would book a post-tax loss of about A$400 million on the divestment.
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