The initial interest in acquiring the wealth management business from ANZ was competitive and drew bids from the U.S., Europe and Asia. Now it appears only one suitor remains.
The first round was encouraging, more parties interested also meant the potential for a competitive bidding process.
That in turn would push the price to the upper ends of the estimated $4.5 billion ANZ believes the unit is worth.
Damaged Reputations
As we hit September, the month a decision will be made on the sale, it seems the field has been decimated with only one party apparently staying the course.
Although due diligence procedures are still ongoing, the final bids are due to land on ANZ CEO Shayne Elliott's desk within the next two weeks.
As more layers get peeled away of the onion that is the Commonwealth Bank of Australia's money laundering probe, the potential buyers might also be having second thoughts on buying any Australian banking assets.
Its Complicated
From the outset of the sale ANZ insisted that the life insurance and wealth assets must be sold kept together. This demand made the sale more complicated by the fact that the buyer will require to establish a white labelling agreement with ANZ.
Meaning the buyer will create the financial and wealth management products that will be sold under ANZ’s brand with the products distributed through ANZ’s branch network.
It Was Simpler
Other Australian banks went for a more simplified disposal process.
Last year, Macquarie Group sold its life business to the Australian arm of Zurich Insurance Group for an undisclosed amount while National Australia Bank (NAB) agreed a $2.4 billion deal to sell an 80 percent interest in its life-insurance business to Japan's Nippon Life Insurance.
One Horse Left?
Out of the remaining contenders local commentators, according to a report in «The Australian» (behind paywall) are of the opinion that MetLife has the appetite and resources to complete the deal.
The hefty price tag is unlikely to trouble MetLife, which has a value of nearly $50 billion. It is thought that financial services provider IOOF, Macquarie or AMP could join a potential bid to take on some of the product production load.
