AMP confirms Dexus exit and review plans
AMP will begin a comprehensive review of its business as it confirms a sale date for AMP Capital’s real estate and domestic infrastructure equity business after delays.
The sale of the business to Dexus Funds Management was previously delayed due to issues around the transfer of AMP’s interest in China Life AMP Asset Management Company Limited.
AMP had now confirmed the first stage completion of the sale and transfer to Dexus would take place on 24 March, 2023.
The maximum total consideration payable by Dexus was agreed as a base purchase price of $225 million. In addition, payment of $50 million of the base purchase price would be deferred until final completion. If this did not occur by 30 September, 2024, the deferred amount would be forfeited by AMP.
The revised structure would enable the transfer to Dexus of most legal entities, holding the majority of AMP Capital domestic assets and management rights.
At first completion, AMP will receive payment of approximately A$337 million from Dexus comprising:
• $175 million of the $225 million base purchase price for the real estate and domestic infrastructure equity business;
• $105 million for sponsor investments; and
• $57 million for the cash, net of the remaining liabilities, held on the business’ balance sheet.
Payment of the remaining $50 million of the base purchase price was contingent on the transfer of AMP’s interest in China Life AMP Asset Management Company Limited (CLAMP) out of the sale perimeter by 30 September, 2024.
The sale followed earlier divestment of the remaining interest in AMP Life, the sale of AMP Capital’s global equities and fixed income business, the infrastructure debt platform and the international infrastructure equity business.
AMP chief executive, Alexis George, said: “Completion of the sale of the remaining AMP Capital business will mark the delivery of a key pillar of our strategy to simplify AMP. The sale allows AMP to have a clear focus on our go forward businesses of retail banking and wealth management in Australia and New Zealand. We will continue to build on the hard work of the past 12 months to position AMP to win in those markets, deliver for customers and drive value for shareholders”.
Following the sale, the firm said it would be conducting a “comprehensive review” of its balance sheet and cost base with the view to returning excess liquidity to shareholders and reducing outstanding debt.
“AMP has been simplifying its business and the next step is to now determine the appropriate operating model and cost base for the future business. This work will be completed over the next six months and reflect the forward-looking focus on AMP Bank and the Australian and New Zealand wealth management businesses, together with the China partnerships,” the firm said.
“AMP’s focus remains on organic growth in banking and wealth management and it does not intend to make any material acquisitions whilst the reviews are ongoing or prior to their outcomes being announced to shareholders.”
It said it would update shareholders no later than its first half results in August 2023.
AUTHOR
Laura Dew
Recommended for you
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
Responsible investment performance concerns have lessened as the market hits $1.6 trillion in AUM, according to RIAA’s annual report, but greenwashing fears among asset managers are on the rise.
