ANZ is selling its OnePath Pensions and Investments business to IOOF for just under a billion dollars, and is the latest bank to exit wealth management.
The bank will receive $975 million in cash under the deal, and IOOF will enter a 20-year strategic partnership to distribute wealth management products though ANZ.
IOOF — originally known by its full title, the Independent Order of Oddfellows — will become the second largest financial advice business by adviser numbers and solidify its number two position by “funds under advice”.
In fact, IOOF said it will more than double its funds under advice through the deal.
The company recently posted a 41 per cent fall in statutory net profit for the past financial year.
However, its underlying earnings, which exclude one-off losses and gains, were steady at $169 million, and well ahead of expectations, sending its share price surging.
The company had also aggressively increased funds under management to $4.6 billion, with the ANZ wealth takeover now the latest step in supercharging its scale.
IOOF will pay for the deal through a $450 million share placement to institutional investors, a share purchase plan and extra debt.
More to come.