Investment manager AMP has said that the sale of its life insurance operations in New Zealand and Australia is “highly unlikely to proceed on the current terms”.
The reason cited was difficulty in meeting the requirements of the Reserve Bank of New Zealand (RBNZ).
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As per the original plan, AMP agreed to divest its wealth protection and mature business called AMP Life to Resolution Life for A$3.3bn ($2.3bn).
The deal was announced last October, with UK-based insurance firm Resolution Life being the buyer.
Resolution Life recently informed AMP that RBNZ refused to clear the deal unless it includes separate ringfenced assets held in New Zealand for the benefit of local policyholders.
According to AMP, this would adversely affect the two parties involved.
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By GlobalData“The failure to meet this condition precedent is exceptionally disappointing as the sale of AMP Life is a foundational element of AMP’s strategy,” AMP stated.
AMP said that it was working alongside Resolution Life on revised terms but on failing to do so would continue to manage AMP Life as a specialist life insurance and mature business.
AMP also indicated that it might refrain from paying an interim dividend to its shareholders owing to the uncertainty related to the divestiture.
Resolution Life said that it still sees the deal as an “excellent opportunity”.
