ANZ Bank gauging interest for potential buyers of NZ life insurance unit

New Zealand Stock Markets

Australia & New Zealand Banking Group is gauging interest in its New Zealand life insurance division after the sale of its life unit across the Tasman shook out prospective buyers for the Kiwi business. 

The lender sent an email to New Zealand staff yesterday saying it was engaging with a small number of parties to test their appetite for buying the business, spokesman Stefan Herrick said. 

ANZ's sale of its Australian OnePath Life unit for A$2.85 billion to Zurich Financial Services Australia sparked interest in the New Zealand division, which the Australian Financial Review's Street Talk column reported could attract a price tag of A$700 million to A$900 million. 

ANZ's OnePath Life (NZ) division reported a profit of $32.3 million in the year ended Sept. 30, 2017, on revenue of $173.3 million. The insurer sold its medical business to nib Holdings for $24.7 million in the 2016 year.

Three of Australia's 'four pillars' have sold their life insurance units as they contend with tighter prudential requirements, selling assets and raising capital to ensure they meet the regulator's levels. 

Still, ANZ's Herrick said insurance remains a core part of its business, and that "will continue irrespective of any decision on who manufactures our life insurance products". 

ANZ had also planned to sell its New Zealand finance company, UDC Finance, although that deal was scuttled by the Overseas Investment Office when it couldn't uncover the ultimate owners of the proposed buyer, HNA Group, and separately the lender sold its online trading platform Direct Capital to First NZ Capital. 

The tyre-kicking comes the same week law firm Chapman Tripp released its annual mergers & acquisitions trends and insights report anticipated financial services would be one of the busier sectors for corporate takeover activity this year due in part to the Australian lenders scaling back the breadth of their services. 

The dual-listed stock fell 1.3 percent to $30.30 on the NZX today, having declined 2.6 percent so far this year. 

ANZ Bank deal to sell UDC Finance to HNA not proceeding

New Zealand Stock Markets

ANZ Bank New Zealand said an agreement to sell UDC Finance to Chinese conglomerate HNA Group for $660 million has terminated after the application was declined by the Overseas Investment Office in December.

The agreement to sell UDC Finance to HNA Group will not proceed as the agreement with HNA has now been terminated in accordance with the contracted timeframe, ANZ said in a release.

Following the termination of the agreement with HNA, we’ll continue to assess our strategic options regarding the future of UDC, although there is no immediate requirement to do anything, said ANZ group executive and New Zealand chief executive David Hisco.

The Overseas Investment Office said it had declined the application because it did not determine who the relevant overseas person was from the information provided about ownership and control interests.


Hisco said UDC continues to be a very profitable business with a strong capital position and also its focus remains on its core business of financing vehicles and equipment for people and companies across New Zealand.

The UDC acquisition would have been the first New Zealand deal for Hainan, China-based HNA, which evolved from a regional airline to a global conglomerate with more than US$90 billion of assets.

However, the company has been coming under increased scrutiny after a debt-fuelled US$40 billion global acquisition spree, and Standard & Poor's warned late last year it would probably downgrade UDC's credit rating if the deal was approved due to HNA's "significant debt maturities over the next several years" which had led to "meaningfully higher" funding costs.

Parent Australia & New Zealand Banking Group's dual-listed shares recently traded down 0.9 percent at $31 on the NZX.

New Zealand blocks HNA bid to buy ANZ’s asset finance arm

New Zealand Stock Markets

HNA’s bid to buy ANZ’s New Zealand asset finance arm UDC Finance for NZ$660m ($463m) has been scuppered by New Zealand’s overseas investment watchdog. 

 ANZ’s sale of UDC was announced in January as part of the bank’s effort to complete $3 billion worth of disposals, mostly in Asia. However, New Zealand’s Overseas Investment Office has declined the Chinese airlines-to-financing conglomerate’s application after regulators were unable to verify who controlled HNA.

Without knowing who the relevant overseas person is, the OIO cannot be satisfied that section 18 has been met, therefore we are unable to grant consent.” HNA has done more than $40bn in deals over the past three years but analysts, including the rating agency S&P, have expressed concern about the group’s high leverage and access to funding.

The company has long-term debt of Rmb382.8bn ($58bn) as of June 30, according to S&P Global Market Intelligence, with net debt 6.5 times earnings before interest, taxes, depreciation and amortisation.

However, questions over its shareholding structure and ultimate owners have dogged the company in recent years.

Earlier this month, US-based software group Ness Technologies filed a complaint with the Supreme Court of the State of New York against HNA and its Beijing-based IT outsourcing unit Pactera.

The complaint states that discrepancies among HNA’s reports of its ownership structure led to questions from the Committee on Foreign Investment in the United States (Cfius), scuppering the acquisition.


ANZ, which on Monday said it would buy back A$1.5bn ($1.2bn) shares following a series of divestments of non-core businesses this year, said the OIO decision will have “no impact” on that buyback.


ANZ shares were down 0.7 per cent in Sydney while the broader S&P/ASX 200 was off 0.3 per cent.