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Wesfarmers plans to divest insurance broking business for $1.02bn

Wesfarmers is reportedly planning to divest its Oamps insurance broking business through an initial public offering (IPO), which has been valued at approximately A$1.12bn ($1.02bn).

Deal

The insurer will first float its Oamps insurance broking business on the Australian Securities Exchange, and then the IPO will be announced, as reported by Reuters.

Sources familiar with the development were also quoted by the publication as saying that a trade sale of the business was also being considered.

Investment bank Gresham is advising Wesfarmers in the floating of the insurance broking business, while Macquarie and JPMorgan are acting as lead managers for the float.

Oamps manages a total of 26 branches and is one of the largest insurance broking networks in Australasia.

In December 2013, Wesfarmers reached an agreement with Insurance Australia Group (IAG) to divest its insurance underwriting business in Australia and New Zealand in a $1.85bn transaction, which is likely to conclude within the next four months.

The acquisition includes Wesfarmers’ underwriting companies that are trading under the WFI and Lumley Insurance brands, along with a ten-year distribution agreement with Coles.

The agreement does not comprise Wesfarmers’ broking business in Australia, New Zealand and the UK, or Wesfarmers’ premium funding businesses in Australia and New Zealand.


Image: Wesfarmers plans to divest insurance broking business for $1.02bn. Photo courtesy of adamr/ FreeDigitalPhotos.net.