QBE to acquire mortgage insurer
Just weeks after withdrawing its bid for Insurance Australia Group, QBE Insurance Group has confirmed that it has signed agreements to acquire PMI Mortgage Insurance Limited in Australia and New Zealand and entered into an in principle agreement to acquire PMI Mortgage Insurance Asia Limited.
The transaction will see QBE paying net tangible assets of around $1,027 billion, with 80 per cent being paid in cash and the rest in a promissory note payable in three years and subject to a number of conditions relating to claims.
PMI Australia is a mortgage insurer for lenders and writes about 40 per cent of the residential mortgage insurance market in Australia.
Commenting on the transaction, QBE chief executive Frank O’Halloran said the purchase of PMI in Australia and Asia was in line with his company’s diversification strategy.
“The acquisitions have been structured to allow us to meet or exceed our minimum profit requirements, even in the event of extremely adverse economic conditions over the next three years,” he said.
AUTHOR
Mike Taylor
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