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AMP revises terms for AMP Life sale

AMP Ltd. revised the terms of its previously announced agreement with Resolution Life to sell its Australian and New Zealand wealth protection and mature businesses, AMP Life.

The revised terms include a total consideration of A$3.0 billion, comprising A$2.5 billion in cash and A$500 million in equity interest in Resolution Life's new Australia-based holding company Resolution Life Australia. AMP is expected to hold a 20% interest in Resolution Life Australia following the completion of the deal, with an option to subscribe to additional capital in the future to maintain its shareholding.

AMP previously sought to sell the businesses for A$3.3 billion, but later said the deal was "highly unlikely" to proceed on the current terms after the Reserve Bank of of New Zealand intervened.

The company plans to use cash proceeds from the sale to fund A$320 million in after-tax separation costs, repay A$800 million in debt and fund capital dis-synergies worth A$160 million.

AMP expects to complete the deal in the first half of 2020, with Resolution Life Australia becoming the owner of AMP Life.

The company also intends to continue its strategic partnership with China Life Pension Co. by transferring its holding in China Life to AMP from AMP Life.

The agreement is subject to regulatory approvals in Australia, New Zealand and China.