October 24, 2018 / 9:58 PM / 23 days ago

BRIEF-AMP To Sell Wealth Protection And Mature Businesses

Oct 25 (Reuters) - AMP Ltd:

* AMP AGREES TO SELL WEALTH PROTECTION AND MATURE BUSINESSES

* ANNOUNCES INTENTION TO DIVEST VIA IPO NEW ZEALAND WEALTH MANAGEMENT AND ADVICE BUSINESSES

* TRANSACTION EXPECTED TO COMPLETE IN 2H 2019

* FOR CUSTOMERS, THERE WILL BE NO CHANGE TO THEIR EXISTING INSURANCE POLICY TERMS OR CONDITIONS

* INTENDS TO SEEK DIVESTMENT OF NEW ZEALAND WEALTH MANAGEMENT AND ADVICE BUSINESSES VIA INITIAL PUBLIC OFFERING IN 2019

* ENTERED BINDING REINSURANCE DEAL WITH SWISS RE FOR NZ RETAIL WEALTH PROTECTION PORTFOLIO, EXPECTED TO GET UP TO A$150 MILLION OF CAPITAL TO AMP

* AMP EXPECTS TO MONETISE ALL NON-CASH CONSIDERATION OVER TIME

* REINSURANCE AGREEMENT IS EXPECTED TO REDUCE NEW ZEALAND PROFIT MARGINS BY A$20 MILLION ON A FULL-YEAR BASIS

* AMP CAPITAL WILL ALSO JOIN RESOLUTION LIFE'S GLOBAL PANEL OF PREFERRED ASSET MANAGERS

* NEW RELATIONSHIP AGREEMENT ESTABLISHED WITH RESOLUTION LIFE AND AMP CAPITAL WILL CONTINUE TO MANAGE WEALTH PROTECTION AND MATURE AUM

* SIMPLIFICATION AND SEPARATION COSTS RELATED TO RESOLUTION LIFE SALE TRANSACTION ARE EXPECTED TO BE IN ORDER OF A$320 MILLION POST-TAX

* BUSINESSES HAVE FY18 PRO FORMA OPERATING EARNINGS OF ABOUT A$40 MILLION ON A STANDALONE BASIS

* REINSURANCE AGREEMENT WITH SWISS RE FOR NEW ZEALAND RETAIL WEALTH PROTECTION PORTFOLIO EXPECTED TO RELEASE UP TO A$150 MILLION OF CAPITAL TO AMP

* CONTINUES TO TARGET TOTAL FY18 DIVIDEND PAYOUT TOWARDS LOWER END OF DIVIDEND GUIDANCE RANGE OF BETWEEN 70 - 90 PER CENT OF UNDERLYING PROFIT

* AMP WILL EXCLUDE 2H 18 EARNINGS FROM DISCONTINUED BUSINESSES IN DETERMINING FY 18 DIVIDEND

* ADDITIONAL CAPITAL FROM TRANSACTION WITH RESOLUTION LIFE WILL FACILITATE REDUCTION IN AMP'S CORPORATE DEBT OF UP TO A$800 MILLION

* REINSURANCE AGREEMENT WITH SWISS RE IS EXPECTED TO REDUCE NEW ZEALAND RETAIL WEALTH PROFIT MARGINS BY A$20 MILLION ON A FULL-YEAR BASIS

* TO SELL AUSTRALIAN AND NEW ZEALAND WEALTH PROTECTION & MATURE BUSINESSES TO RESOLUTION LIFE FOR TOTAL CASH & NON-CASH CONSIDERATION A$3.3 BILLION Source text for Eikon: Further company coverage:

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