NationalAustralia Bank Ltd. completed the of an 80% stake in its lifeinsurance business to Nippon LifeInsurance Co. for A$2.4 billion.
The transaction occurred through the sale of 80% of MLC Ltd.The bank will retain a 20% stake in the new life insurance business and retainfull ownership of the existing investments business, according to anOct. 3 release.
As part of the deal, National Australia Bank on the same daywill commence a long-term partnership with Nippon Life, which includes a20-year bancassurance agreement to offer life insurance products through thebank's distribution networks.
The transaction is expected to increase the bank's commonequity Tier 1 ratio by 50 basis points. It has also resulted in a loss on saleof approximately A$1.2 billion to A$1.3 billion.
Following the transaction, National Australia Bank willretain the MLC brand, although it will be licensed for use by MLC LifeInsurance for 10 years and will continue to be used in the bank'ssuperannuation, investments and advice business.
With the completion of the deal, there will also be changesto the board of MLC Ltd., the entity that operates the MLC Life Insurancebusiness.
Peter Grey, former Australian ambassador to Japan, has beenappointed as chairman of MLC. In addition, Andrew Cornish wasappointed as independent board member, while Hiroyuki Nishi and ToshihiroNakashima were named as nonexecutive board members.
As of Sept. 30, US$1was equivalent to A$1.31.