Deutsche buys Paladin

Norwich Union has pulled out of Paladin Australia, selling its 50 per cent stake in the property investment business to Deutsche Assset Management

Norwich Union has pulled out of Paladin Australia, selling its 50 per cent stake in the property investment business to Deutsche Assset Management.

Under the terms of the deal, Deutsche will merge the group’s listed commercial and industrial trusts into its own products. Paladin's other property securities, unlisted interests and other in-vestment vehicles would also be integrated into Deutsche's funds management operations.

If the proposed merger is approved, the combined listed office trusts will create the largest listed office trust in Australia with total assets valued at nearly $1.9 billion.

Deutsche Asset Management chief executive officer Michael Monaghan says the merger was prompted by the desire to gain scale in the property trust industry and the strategic fit between the two companies.

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"Paladin's operations closely resemble our own with both groups managing two listed property trusts, with similar assets. A merger is a natural step forward in a marketplace that rewards size," Monaghan says.

Norwich purchased 50.1 per cent of Paladin in March last year with plans to acquire the remain-ing share capital in 2004.

At the time, the purchase was designed to boost the funds management operations of Norwich and create a property team, something Norwich had been lacking in the past.

However in the wake of the merger between Norwich and fellow insurer CGU,the new company CGNU has viewed Paladin as a non-core investment and stated the merger with Deutsche would provide investors with better returns.