HONG KONG, 21 September 2017 – AIA Group Limited (“AIA” or the “Company”; stock code: 1299) has reached agreement with the Commonwealth Bank of Australia (“CBA”), subject to securing all necessary regulatory and governmental approvals, to acquire CommInsure Life and Sovereign, CBA’s life insurance business in Australia and life and health insurance businesses in New Zealand. In addition, AIA will enter into 20-year strategic bancassurance partnerships with CBA in Australia and ASB Bank Limited (“ASB”) in New Zealand.

“This transaction provides a highly-attractive opportunity to transform AIA's businesses in Australia and New Zealand by extending our protection market leadership positions and expanding our distribution capabilities through strategic long-term partnerships with leading retail banks in these markets.

“The transaction will generate substantial financial benefits for our shareholders through enabling us to deliver further profitable new business growth by leveraging AIA’s capabilities and leading product solutions.

“The acquisition of CBA’s life insurance businesses and the new 20-year bancassurance partnerships with CBA will strengthen AIA’s protection market leadership and expand our distribution capabilities in these markets. We look forward to welcoming our new customers and colleagues, and working with CBA to deliver innovative insurance products and services that meet the growing financial protection needs of customers across Australia and New Zealand.”

The gross consideration to be paid with respect to the transaction is AUD3,800 million (which is equivalent to US$3,036 million) payable in cash on completion of the transaction and subject to certain adjustments at completion. After taking into account the proceeds from reinsurance agreements, and the free surplus within CommInsure Life and Sovereign, the final net cash outlay by AIA is expected to be AUD1,882 million (equivalent to US$1,503 million). The aggregate gross embedded value of CommInsure Life and Sovereign was AUD3,531 million (equivalent to US$2,821 million) as at 30 June 2017.

 

The parties are working towards completion during 2018.

 

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AIA Group Limited and its subsidiaries (collectively “AIA” or the “Group”) comprise the largest independent publicly listed pan-Asian life insurance group. It has a presence in 18 markets in Asia-Pacific – wholly-owned branches and subsidiaries in Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau, Brunei, Cambodia, a 97 per cent subsidiary in Sri Lanka, a 49 per cent joint venture in India and a representative office in Myanmar.

The business that is now AIA was first established in Shanghai almost a century ago. It is a market leader in the Asia-Pacific region (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its markets. It had total assets of US$200 billion as of 31 May 2017.

AIA meets the long-term savings and protection needs of individuals by offering a range of products and services including life insurance, accident and health insurance and savings plans. The Group also provides employee benefits, credit life and pension services to corporate clients. Through an extensive network of agents, partners and employees across Asia-Pacific, AIA serves the holders of more than 30 million individual policies and over 16 million participating members of group insurance schemes.

AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock code “1299” with American Depositary Receipts (Level 1) traded on the over-the-counter market (ticker symbol: “AAGIY”).

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